Banks should stop making it so easy for us to get into overdrafts

It's hitting the most vulnerable the hardest, FCA says

The Financial Conduct Authority (FCA), who set the rules for the financial industry, think we're in too much debt (didn't need you guys to tell us that but thnx.)

What it means: Brits are borrowing money at the fastest rate they have since November 2016, reaching levels of debt that aren't too far from where we were around the 2008 crash. It's the usual story: wages aren't growing fast enough + we all have bills to pay which just aren't getting any lower.

But the financial industry could do more to help prevent us from getting into this much debt. The FCA has made a proposal saying a few changes to the way banks communicate to us about overdrafts, for example, could change our behaviour: like sending us a mobile alert when we're close to going into overdrafts, and not labelling them 'available funds'.

The thing is, banks make £2.3 billion from fees for overdraft charges every year, so in some ways it's in their interest to rack up our debts.

But people say this is exploiting some of the most vulnerable in society: 30 per cent of those fees come from a small minority of customers in tough situations, like young single parents needing pay day loans, who end up paying on average £450 per year in fees.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?