Tuesday, January 30, 2007

Oh The Humanity

Jack Layton of the NDP is taking on banks for their service fees. "Why me?" cry the bank owners, essential monopolists in today's electronic transaction world, who were only able to scrape by with $14 billion in profits last year.

Of course, the banks have their useful idiots to defend them. One such is the Sun's Tom Brodbeck (one wonders how long you have to bow and scrape on what Sun pays its reporters before you get to cash in on the Tory big bucks and land a cushy job at a fake research agency).

Brodbeck writes, "I don’t know what kind of glue this guy is sniffing. Consumers have all kinds of choice on where to bank and how to withdraw money. And just like 20 years ago, you can still do it for free."

This is simply not true. If Brodbeck is banking for free, then he's either paying a monthly service charge, or he's keeping some significant minimum balance in his (non-interest paying) account. Of course, on a Sun salary, Brodbeck shouldn't know anything about high income banking.

The bank charges are a recent invention. I remember when there was no charge at all for withdrawing from the teller (and I think it was something like 14 cents to write a cheque). Along came bank machines, and they were at first free to use as well. Great stuff; none of us liked waiting in line for the teller. But then not so long ago - it's really only five years or so ago - banks started charging fees. First to other banks' customers. Then their own customers.

The strategy is of course to blame the customer for running up their banking costs. This is, of course, a con game. When customers doing what they have always been doing suddenly start getting much increased charges, it's not the customers' fault. No, it's the $14 billion industry that's gouging them. Again. And making up bank fairy tales isn't going to change that fact.

Brodbeck says, "Everybody likes a little bank bashing." There's a reason for that. Banks, almost uniquely, deserve to be bashed.

3 comments:

  1. You're voluntarily paying a convenience fee for a service.

    If you don't want the convenience of getting to take out your money at 500+ locations across your city, I suggest getting a 'free' ING account.

    If you're too stupid or too lazy to do so, you deserve to get 'gouged'.

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  2. Wrong. They are paying me so they can use my money while I'm not using it. If they were not in a monopoly position, they would be paying me to use the ATM, as it saves them so much on staff costs.

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  3. geez - what a volcano - i've been meaning to blog about this for months but can't bring myself to cos i'm afraid i'll just spew endlessly.

    the thing that's interesting me lately is the way everyone is becoming a banker - department stores, appliance manufacturers, telcos, just about everyone. and they advertise "interest free" terms (which, upon reading the fine print) means that it's theoretically interest free if you follow instructions precisely (such as paying a particular amount before a particular date each month).

    if you don't, you then attract the "excuse me, i'm your not so interest free 21+% interest on the full amount you'll pay each time you do this" fee, which is a bit shocking. i bought a lounge recently and was offered "interest free" terms - it was only later that i learned that each time i stuff up (and this is entirely possible - already i have had to phone the company twice to ask why they (each time) somehow "undo" my interest free status, forcing me to ring them each time and suspend my payment until it's sorted out, meaning that within days i'll be beyond my first month and close to $100 (interest only) in default before i even start. (and from there, the $100 becomes part of the amount they charge interest on if i don't manage the due date again meaning my debt becomes compounded before i can even get started). (sorry about all the brackets - can't seem to huff and puff and spell etc at the same time).

    and, while i asked for $4000 in credit (only cos i bought this thing at night and was talked into doing it "simply" rather than visiting my own bank the next day), they've now mysteriously given me $7500 credit limit (without really knowing anything about me or my credit rating etc). another credit card. woo hoo.

    anyway - i'm garbling here, but that's just one part of it - so much about these "banks" really really disturb me in terms of what is apparently legal.

    clearly there's more money in moneylending than selling things. can't help thinking about jesus in the temple, throwing these bastards out on their ears.

    except they're not the problem - merchants have always been opportunists the most part. it's the governments who allow these sorts of things who are to blame and really from there we can only blame ourselves for the dickheads we end up with.

    in the end the problem is the millions of sonambulists out there, watching lifestyle shows on their "interest free" plasma tv's, fat as houses, watching rome burn.

    no wonder you don't like groups.

    ReplyDelete

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