This is Money Blog

Ask a simple question...and Bank of Ireland

It started so easy - all I wanted to know was how much, if anything, would I be charged, for withdrawing cash abroad – specifically in the former residence of the Celtic Tiger, Ireland.

Sure, when one uses a cash machine in another country, one does usually get hit with a charge for the convenience.

But I had hoped, that given my destination, and the bank involved, that I might get lucky. A long shot, granted.

But why? Well, after moving to the UK from Dublin, a decade ago, given that I already had a bank account with Bank of Ireland back home, I concluded that the easiest thing would be to stick to the devil I know and open a new account with the group here in the UK. Yes us personal finance journalists, can be victims too of the customer apathy we so often go on about.

So I am going back to Dublin for a few days and I was wondering what charges I would incur as a Bank of Ireland customer, using a Bank of Ireland ATM…in Ireland.

After all, bank charges, for even the most trivial of services, (in an ATM’s case, self-service) are big business.

And admittedly, until now, I have never checked out what the bank fees I usually endure when I am back in Dublin  actually are.

I rang Bank of Ireland’s one-stop customer service shop - Banking 365 - and put the question to them.

It mustn’t be a common query, as the service agent, although pretty sure I would be charged something, when prompted on exactly how much, was left, well, dumbfounded and didn’t seem too concerned to find out – she just recommended I use ATMs as little as possible and that when I do, take out large amounts. Hmm…

I explained that I would prefer a more specific answer and the by then flustered agent put me onto someone else, and they then passed the buck onto another colleague, eventually someone decided that the best course of action would be to put me through to the bank’s global markets division.

I seemed perplexed by this gesture, surprised even. Why would this division of the bank, which deals, in Forex trading, structured products and corporate deposits be the font of all knowledge, in cash machine charging?

Of course, it wasn’t. But they did get someone to call me back, with an answer. Methinks, in the end, it was in the region of five people I spoke to.

But anyway, what should a Bank of Ireland customer using a Bank of Ireland ATM in Ireland, expect to pay for the privilege? Well, a decent amount it would seem.

The basic charge is £1.50 for a withdrawal, on top of a 2.75% usage fee for the amount withdrawn. So if, I withdraw say 100 euros (£86.90) that will, all in all set me back, circa £3.91 or 4.49 euros, possibly a little less than it would have cost me on my mobile, if I had used it, to call Bank of Ireland to find out.

Just as well, sterling is so strong right now…oh hang on.

- Philip Scott, journalist, Thisismoney.co.uk

Has Nationwide lost its halo?

I like Nationwide. I have a number of its products. I like the notion of mutuality.

However, it seems to me that the UK's largest building society's may lose the shine from its halo.

So far this year it has slashed savings rates further than many of its rivals, 'simplified' overdraft rates (so that most people will see a rise), increased credit card rates (despite further dramatic falls in the base rate) and introduced some charges for foreign spending (outside Europe) on its credit and debit cards.

There's also some confusion about Nationwide's mortgage tracker. It cut the 'collar' or rate floor for many of its customers from 2.75% to 2%, which seemed over-generous. Now it seems to be failing to enforce even the 2% collar for some customers. The chatter online suggests it failed to spell out the collar in some 'key facts' documents and therefore can't enforce any lower limit on those mortgage deals. If widespread (a big If), the error could be coslty, paid for by less generous products elsewhere - so maybe lower savings rates.

Last year, Nationwide also had administrative issues. Its cash Isa delays frustrated customers, although some rivals were also guilty of the same. And now it emerges that it's also shutting a handful of its less profitable branches (Update 15/3: Full details).

Now, don't get me wrong. I think Nationwide is one of the UK's better financial services outfits, although given the shabby competition - RBS/Natwest, HBOS, etc - that's not a particularly great achievement just at the moment. And it is robustly defended by some members. There's a good example on our Nationwide savings article, which had an unprecedented reader comment response - albeit with most critcising the building society.  

Nationwide has a halo-effect brand, as its known in marketing circles. In these troubled times, it would be wise to protect it.

That's my view. Now tell us your thoughts on any Nationwide issue. Let's help the UK's biggest building society keep its halo...

- Andrew Oxlade, Editor, This is Money

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Credit card Laurens won't be disciplined

So, Lord Mandy spent yesterday evening casting aside his ermine cloak to shake his finger at representatives from the credit card industry, having called them to Whitehall and to task.

We learned today the Business Secretary Peter Mandelson has given them two weeks to stop ripping off customers pronto or face an Office of Fair Trading investigation. In turn, they have agreed to give customers a 30-day period of grace if they are having problems repaying their debts, as long as they seek the help of a debt advice agency.

But, let’s face it, this is about as far the revisions are going to go. The Lauren Coopers of the credit card industry (that's the obnoxious student of Catherine Tate fame) didn’t shuffle into Whitehall chewing gum and skip out an hour later smelling of roses.

We all know how well these Government ‘warnings’ have worked to date. We have been listening to Brown’s unique, son-of-a-Reverend, fire-and-brimstone-style bellowing at banks for weeks and watched with something not even approaching surprise as they have slouched back and replied, ‘Bovvered?’

The majority couldn’t be ‘bovvered’ passing on the Bank of England rate cuts either on their loan or mortgage rates, a series of them withdrew their tracker mortgages straight after the cuts (just in case customers might land a good deal, God forbid!), but they can cut their savings rates all right.

Approximately one fifth of the industry has cut the interest rate on their savings accounts, mostly by 1.5% or more. This is pretty substantial given the fact that the majority of accounts pay negligible rates as it is; if the rest passed on the rate cuts in full, then 12% of the market would actually be paying no rate whatsoever, according to price comparison website Moneyfacts.co.uk.

So what does Mandy think he will be able to do with the credit card industry’s Laurens?

Lord Mandelson (LM): ‘Do you know that you have failed to pass on any interest rate cuts on your credit cards despite the rapidly dropping base rate? In fact, the average credit card rate has risen from 16.4% to 17.03% over the last year alone!’

Credit card industry representative (CCIP): ‘But am I bovvered?’

LM: ‘Do you realise this is making life particularly difficult for card borrowers, given that an increasing number of 0% balance transfer deals are also being withdrawn from the market and customers are regularly finding themselves trapped on one card with a punitive rate?

CCIP: ‘Bov-’

LM: ‘With rising balance transfer fees thrown in…’

CCIP: ‘-ver-’

LM: ‘… and general tightening of lending criteria among lenders?!’

CCIP: ‘-ed.’

Fact: credit card rates have never been linked to the Bank of England rate, so Mandy has his work cut out for him.

Many will no doubt fall back on the hackneyed, but somewhat valid excuse nonetheless, that their loan books carry a higher level of risk following the credit crunch and higher credit card rates reflect this.

Also, some commentators have been calling for the Government to stamp out wider revenue-boosting sly tactics by card providers. This means such things as higher balance transfer fees and putting a 0% purchase period on a balance transfer card, even though this generally disadvantages the customer by tricking them to incur interest on their substantial balances. Then there’s also the practice of making customers pay off their least expensive debt first, leaving the most expensive until last.

Well that’s just not going to change. Bad deals are just a facet of capitalism, which should be stamped out through competition, but not Government hand-holding. For example, banks still have bonus rates, tricky withdrawal clauses and annoying conditions on their savings accounts, and that is unlikely to change in the near future, especially through any Government intervention.

On the other hand, the OFT did conclude the credit card industry was raking in more than £300m in unlawful charges in 2006 and put a £12 cap on all fees.

Could something as drastic happen with credit card interest rates if the Government manages to get a word in edgeways with its wayward charges?

Can we really expect a fair deal from the Laurens of the credit card industry?

Should we even be bovvered?

PPI: Industry outrage should not halt this victory

The financial services industry has various euphemisms to deploy when it wishes to display its displeasure at some new regulatory constraint thrown its way.

Usually, when a trade body expresses 'surprise' at some proposal that could hit its members' pockets, it can be translated roughly as 'you've got to be kidding'.

When a group 'agrees - up to a point', it actually means 'not on your life'. And a pledge to 'work closely with the authorities on these proposals', is code for 'over our dead bodies, sunshine.'

By this measure, you imagine the sentiments behind the press releases pinged off in response to the Competition Commission's plans for payment protection insurance (PPI) would have been unprintable.

They range from the relatively measured 'FLA highly disappointed with Commission's PPI recommendations,' from the Finance and Leasing Association, through the vaguely hysterical 'PPI ban is devastating for borrowers,' from the Association of British Insurers, to the frothing 'Competition Commission simply wrong on PPI,' from the British Bankers' Association.

So what has got so firmly up their noses?

Today the Competition Commission published it’s provisional proposals for PPI. It is the beginning of the end of its work on PPI that started in February 2007. PPI is the insurance sold alongside loans, credit cards and finance packages to cover repayments if the borrower is unable to work through accident, sickness or some cases of unemployment.

The charge list against PPI is long but includes, in no particular order, that it is overpriced, sold to people that can never claim on it, in many cases cannot be cancelled or refunded, will not cover many of the most common causes for unemployment, may pay out only a fraction of the amount owed and has been forced on to customers with pushy sales tactics, sometimes without their knowledge.

This is Money has argued for change in the PPI market since 2002 and later launched a campaign on the issue. We regard the proposed changes, if enacted, as a significant victory.

As insurance correspondent, I have covered several cases of customers who have suffered huge losses as a result of PPI policies that were mis-sold or could not be cancelled.

We have even produced a guide and template letters for anyone that thinks they may be able to reclaim PPI premiums.

Chief among the 'remedies' the commission proposes is that PPI may no longer be sold at the same time as the credit or loan being taken out.

Sellers will have to wait 14 days before they can re-contact borrowers to see if they want to also buy the insurance, rather than offering it when the customer takes the loan.

A small change you might think, but it will make a huge impact. If carried out, it means that the PPI sellers that have made huge profits out of the product (banks, shops, credit card lenders, car salesmen) will now have to rely on the customer proactively choosing PPI. They will no longer be able to apply sales processes that have often left borrowers feeling they have no choice but to take the insurance.

It also means that customers will be better able to compare prices for PPI across the whole market. Buying the insurance from an independent seller, one that is not also selling the accompanying credit, is much cheaper so the traditional sellers that have enjoyed the run of the market will likely have to lower their prices to compete. 

The trade bodies wail that this change will effectively kill the market for PPI at a time when unemployment is rising. PPI may be flawed, they say, but we should not throw the baby out with the bathwater.

Luke warm welcomes have also come from the price comparison websites. These sites have cast themselves in the role of 'consumer champion' and, as such, have acknowledged the benefits consumers could reap from the changes. Yet they, too, have expressed fears that fewer policies will be sold, reducing the commission they make, and that the costs of loans may have to rise if the revenue from PPI is removed from lenders.

Being pragmatic, it is probably fair to say far fewer PPI policies will be sold if these changes come to pass.

But this betrays the fact that borrowers don’t actually see the need for this insurance unless it is being aggressively sold to them. Loans rates may have to rise but at least prices will then be transparent. At present, the financially savvy avoid PPI, benefitting from cheaper rates while the rest subsidise them, partly through unnecessary PPI.

If rising unemployment is making PPI more necessary, consumers will surely appreciate its value and will seek it out for themselves. The Commission’s proposals allow for this.

Or else, they will see that PPI sold on the terms that sellers have been offering is grossly over-priced and brings limited benefits. In which case, the market deserves to die.

- Ed Monk, News Editor, This is Money

Web week: Credit cards to disappear into a black hole

In the week the world faced disappearing into a boffin-created black hole it was apt a Tomorrow's World-style money story attracted attention.

Like the cheque book and video recorder, the credit card is apparently on the way to extinction - to be replaced with paying for items with mobile phone, watch, key fob or fingerprint.

Credit card giant Barclaycard is pouring millions into contactless payment systems, that will do away with the card aspect altogether.

Whether the concept of paying by watch, fingertip, or even eye recognition, becomes the next iPod or the Sinclair C5 depends on the fickle public, but you can be sure banks' ambitions behind contactless payment are to get us to spend more.

That desire also lay behind the latest offers by struggling housebuilder Barratt, which stepped in where the Government feared to tread, in offering to pay stamp duty for buyers and even said it would insure homebuyers against a loss of up to 15% on their new property.

This is Money readers said that would not be enough to get them to buy a brand new home. Looks like it may be back to the drawing board for housebuilders' futures.

This post also appears as a column in the Mail on Sunday

- Simon Lambert, assistant editor, This is Money

The most read articles on This is Money this week

1. Credit cards will be extinct in five years
2. New plea for Brown to save house market
3. Barratt to pay stamp duty for new homes
4. Whistleblower: RBS trains staff to lie
5. The best - and worst - UK banks revealed

Payday loans predators bite us all

What a truly uplifting experience it has become looking for a loan if you are utterly broke and have been turned down almost everywhere.

I’m not being sarcastic: a whole host of jolly companies have sprung up over the past four or five years offering ‘payday’ loans to those who do not have enough money to last until their next pay day. The websites are a joy to visit, peppered with pearly-toothed, attractive people having hilarious fake telephone conversations, surrounded by exclamation marks and phrases such as ‘Instant answers! No faxing of documents! Up to £750! No more worries! Typical APR of 1,355%!'

Er, what was that last one again?

Yup, you didn’t misread – these companies have APRs higher than the monthly salaries of most of their customers. Sure, they’re providing a much-needed service to those who find it impossible to get credit elsewhere. Sure, if you need an extra £100 one month and pay back £125-130 the next payday, what’s the harm? Everyone needs a helping hand, right?

Wrong.

They’re not providing a service; they’re lining some budding entrepreneur’s pockets – much to the misery of people trying to make ends meet. I would love to know the percentage of these loans that are actually repaid in full the following month (and I won’t as e-mails enquiring about this to two of these companies, Payday UK and Samedaymoney, have disappeared into the ether). 

My guess is that a relatively small proportion of borrowers in this position are a sure bet for repaying on payday. Loans like this make companies more money by burning away like unquenchable embers, so that the borrower will never truly be able to put out and they eventually consume them.

Take the theoretical case of downtrodden Joe, a labourer who had to hire a van to move flat this month and who is now £100 short, which he needs to pay his council tax. He could really scrimp to pay it off, borrow from family or friends, but pride sends him to a payday company.

The £30 he pays them pushes him out again next month, or he leaves it for a while, leading to a bigger headache the next month.

These ‘deals’ are exploitative like those credit cards provided by Provident Financial – the doorstep lender – which has a rate of 39.9% on its Vanquis Visa card on limits up to £1,000. Its ‘pre-paid’ card (read: defacto credit card), has a rate of 183.2%.

Preppy advertisements highlighting these offers are no different to the TV advertisement by Picture Loans criticized by the Advertising Standards Authority last year for trivialising large loan applications.

A mother organizes a £25,000 loan while doing household chores and dealing with her kids. ‘Oh that’s such a help, thanks so much,’ she quips. Unsurprisingly, she fails to add, ‘That should pretty much scupper any chance I have of paying for this lots' higher education, or having a comfortable retirement. You really have been a help. Thanks soooo much.’

Don’t even bother blaming the loan applicants themselves. Many of us hit out at the borrowers, but of course you’re going to jump at any offer of money if you are utterly cash-strapped and it is practically thrown at you.

You’re also kidding yourself if you think this will only affect poor downtrodden Joe and not you and me. This is exemplified quite conveniently for me by the whole credit crisis kafuffle. Lots of ‘sub-prime’ riff-raff can’t pay the mortgages they were handed on a silver platter, no questions asked, this gets packed off into the now oft-quoted ‘securitised debt’ packages, sold off en masse to financial companies, these companies never see a bean of the repayments, they suffer billions in write-downs, have their credit crunched and then we end up with, oh, the credit crunch.

Cue mortgage rate rises, credit limit cuts, falling house prices due to reduced demand and a rise in inflation (resulting from years of said easy credit).

Suddenly, downtrodden Joe’s short month eventually has a knock-on effect on privileged Ophelia: she can’t go inter-railing this summer because Mummy and Daddy overstretched themselves on cards while holidaying last summer. Their mortgage has gone through the roof, the value of the country bolt-hole has plummeted and, who would have guessed, the price of everything from Chevre Log to Lacrosse kits has shot up.

Sift through the entrails of the credit crunch behemoth and you’ll find the Citigroups and Merrill Lynchs, which swung their jaws wide to swallow thousands of the aforementioned debt packages. Deep within them, you will find the sleek predator that is these exploitative loans.

And within them, you will just find someone who just couldn’t make ends meet one month, and so filled out a loan application.

Barclaycard is no longer funny

It's official. The credit crunch is not funny. Says who? Only Barclaycard, chief exploiter of the credit boom, that's who.

The credit card firm is dropping comedy from its ads after almost 25 years.

In the past, the plastic giant has used Alan Whicker spoofing himself, Rowan Atkinson's blundering spy and even Friends' star Jennifer Aniston.

Its ads currently feature Julian Rhind-Tutt and Stephen Mangan, the stars of C4's Green Wing, but their next ad will be the last after a two-year run.

- Evening Standard's City Spy column

Credit crunch? Bank are throwing loans away

Praise the Lord, I’m in the money. The pity is that it’s not actually mine; it’s my banks. They won’t stop throwing it at me, despite my protestations. But, wait a minute, aren’t we supposed to be in the throes of a credit crunch?

That’s the problem, you see, we are. So much so that banks are falling over each other to seduce High Street customers with great savings rates. They’re also keen to sever off any dead limbs, such as those customers that borrow money but always pay it back on time, robbing them of much-needed interest in the process. Could Egg please stand up?

But as they push these hapless customers away, they are just as keen to grab hold of another type and press them to their bosom: the borrowers that take on debt and can handle it, but only just.

That’s why I constantly got loan offers and unsought-after overdraft increases pushed through my letter box. I’m one of those people who spends like crazy, racks up debt, pays my due in interest charges, gets scared and then lives frugally for a time to pay it all off.

Banks like people like me now more than ever, mainly because we’re money-earners; they can lend to us, make a killing, but suffer little risk because we always come good.

Happy days all round? Not exactly. Anyone would be a fool to take advantage of many ‘deals’ now being offered by banks to some customers. They’re an expensive sweetner aimed at sugar-addicts who are liable to go on an all-out binge and line the chocolatier’s pockets in the process (we’re still talking about debt here).

For example, I have a modest overdraft with NatWest which is pushed to the limit at Christmas and when holidaying, but is always reigned back in. I have practically no credit card debt. As a result, I receive regular overdraft increases completely out of the blue that are absurd relative to my income.

I have now got an overdraft limit of over £5,000 which, at an interest rate of 19.41%, I will never use. Add to this offers of £10,000 loans over five years at a rate of 10.4% which, I must remind myself, I do not need and will pay £6,400 in interest for the privilege.

For the bank though, the offer makes complete sense because it’s all about making money.

Similarly, a colleague recently received a letter from Barclays offering secured loans of £15,000-100,000. It said it would waiver the £995 arrangement fee if they took up the deal before May 20, but this ‘deal’ was presented in terms of low monthly payments, not the total amount repaid.

A loan of £15,000 at a monthly rate of £155.22 over 300 months (these were the figures quoted) amounts to a total repayment of £34,566 (not quoted). The £100,000 would result in a repayment of £230,433 over the same period.
Why not look into remortgaging instead? And is encouraging people into ludicrous loans over 25 years now considered responsible lending?

I suppose the catch-cry of the banking industry is that it is just fine as long as the person can afford to make the repayments.

There’s also the credit crunch; banks need the money, and everyone needs them to stay afloat.

After all, the end justifies the means. Doesn’t it?

Abbey's £130 penalty for one credit card mistake

I've become a victim of the newly sharpened practices of Britain's wily credit card industry. One late payment has just cost me at least £130.

Yes, as editor of Britain's most read financial news website I should known better. But it was a simple mistake.

I've had an unused Abbey credit card for several years. To rekindle my interest, the company offered me interest-free credit on spending for six months. The timing suited me: I rapidly ran up a debt of around £4,000, allowing me to pay for a new patio and other garden improvements.

However, last month - halfway through the 0% offer - I missed a repayment. The punishment was swift. I was immediately stripped of the 0% rate, with the cost of borrowing hiked to 15.9% a year. My statement registered a £12 penalty charge and £59 interest, rising to £61 next month unless I cleared the entire debt.

I accept it's my responsibility: I should have checked the small print; I should have set up a standing order or direct debit for at least the minimum repayment. But, like millions of other Britons, I have two demanding children and one demanding job. Time is tight.

The point of this blog post is to highlight the shift in the industry - it will cost you. Once, it was easy for shrewd borrowers to exploit loopholes. You could borrow money on credit cards at 0% for up to a year then shift it on to another year-long interest-free deal. Even if you did miss a repayment, there was some flexibility. Some people racked up as much as £40,000 to offset against their mortgages, saving hundreds of pounds a month in repayments: read more.

But no longer. A ruling from the Office of Fair Trading in 2006 ruled typical fees of £25 were unfair. It effectively capped charges at £12 per misdemeanour.  Lenders obviously haven't taken it lying down. They cut penalties to £12 - and then set about ratcheting costs and charges in nearly every other area.

So now you need to watch out for these pitfalls...

- Balance transfers come with a charge of between 2% and 3% (just a few cards offer fee-free balance transfers - find out who)

- Expect higher interest rates, especially when withdrawing cash or on credit card cheques

- If you have interest-free debt on a balance transfer and some from spending on a higher rate, it's now likely that you'll have to clear the free money before being able to tackle the pricey debt. And you'll probably only realise when it's too late

- Previously most credit card companies would refund charges on a first offence. It's now less likely. I tried this with Abbey - it now has a strict policy of one strike and you're out.

- More pitfalls, by Mail on Sunday's Jo Thornhill

- Case study: The tiny credit card mistake that cost £182

The current crisis also means lenders are tightening their criteria, leaving fewer alternatives for borrowers who place a wrong foot in the credit card minefield.

Fortunately, I can cash in on a healthy return from Latin American stock markets, which should help me clear the debt within a month or two. Forced investment selling is bad practice and pot luck - a booming Brazil has helped me ride it this time. Really I should have at least three months' wages tucked away for emergencies - and I shouldn't spend money I don't have (or have easy access to).

But I, and millions of other borrowers, have operated in an environment for the last decade of easy credit that rewards those willing to exploit it.

The tide has turned. Saving is saintly; debt is dangerous. Tread carefully in post-credit crunch Britain.

- Andrew Oxlade, Editor, This is Money.co.uk

Other recent Abbey yarns (yes, they've had a few customer services issues)...

> Dead 'Abbey' customer is alive and well
> Abbey customers fuming over delay
> Abbey fails relatives of deceased customers
> Abbey lost then shredded my details
> Abbey tops league of rip-off bank fees
> Abbey plays God
> Abbey is a complete mess
> Abbey delays cost me hundreds in lost interest

Feel free to highlight new credit card tricks or to tell your story...

Why do you hate people in debt?

It’s becoming an increasingly frequent occurrence on the site: we write a story about debt or bank charges and a slew of often quite nasty reader comments about indebted people follow.

Recent figures from the Insolvency Service show less of us fell into chronic debt in 2007, but several factors point to the possibility that personal debt will spiral again in 2008.

Now this may sound harsh, but it seems that many of our readers couldn’t care less about this. And what’s worse, are keen to condemn those who find themselves on the brink of insolvency.

All it takes is a quick look at the Dealing with Debt section of This is Money to confirm this. Why not have a look? A story entitled ‘Bank amnesty to help badly indebted’ details how those who are chronically in debt should find it easier to pay back the majority – though not all – of their debts in 2008.

With no small measure of sarcasm, ‘Don’ from Birmingham, posts this comment beneath the story: ‘I was offered umpteen credit cards and accepted them all, some at 30%. I am now heavily in debt but had a lovely time spending their money. I have no house, nor property and am on long-term DSS benefits.

‘Of course I can't pay it all back but the companies should never have lent me any money in the first place. They are the money experts, not me, so tough on them. Everyone should knock these companies. I don't lose any sleep over them. “Live within my means?” Don’t make me laugh.’

Before I respond to this, let me put my cards on the table. I’m not chronically in debt, so my defense of those indebted people in my articles is not fuelled by self-justification. However I did rack up over £15,000 worth of debt over four years at university despite relatively well-paid part-time jobs and quickly found the interest, living costs and bank penalties too much to deal with.

Thankfully, my parents stepped in and paid it all off, but if they hadn’t, I think I’d still be caught in the debt spiral. My point is not all chronically indebted people are greedy or incompetent. In order to get an education today, you have to be either rich or a genius and many would view an education a necessity, not a luxury.

Perhaps that’s why I find the attitude of some of our readers towards those in debt slightly discomforting. It sometimes borders on the self-righteous view that all indebted people are spongers.

Yet the figures from the Insolvency Service show that an increasing amount of indebted people are owning up to their debts and making amends: the majority are volunteering to take part in debt solutions such as bankruptcies and Individual Voluntary Arrangements (IVA) instead of being forced into them by their creditors. And living under an IVA is a frugal, sobering experience, which could be seen as a genuine attempt to pay back a large part of debts that had gotten out of control.

This may also be verging on the sacrilegious, but surely creditors should also take some of the blame for our nation’s £1.3 trillion worth of personal debt?

The caustic comments that often follow many of our stories on bank charges take the view that the indebted bank customer is to blame for invoking the penalties at the centre of the current bank charges High Court case. It’s as if the credit provider is entirely blameless for throwing the doors to its coffers wide and sitting idly by while they are ransacked.

If the ‘unauthorised’ overdrafts that give rise to these penalties are the equivalent of theft, as if often implied, then they are also the equivalent of inviting someone into your home to take your personal possessions, then charging them for the privilege, but not informing them of this ‘entry free’ before they set foot over the threshold. And it is this ‘open door’ policy that takes advantage of those most in need, who jump at any extra scrap of credit they are offered every month.

Just look at any of the reader comments on any of the stories on our ‘Reclaim bank charges’ section, or the story ‘HSBC in row over £25 stealth charge’.

In our rush to condemn these seemingly gormless people who can’t handle their own finances, we’re forgetting the real moral issue underpinning the problem of chronic indebtedness: are these charges that have led people down the garden path morally defensible? Of course they’re not.

But as we’re dealing with ‘poor’ people who lack the common sense to handle their own affairs, why bother even thinking about it when a glib comment will suffice?