Thursday, January 06, 2011

The great bank stitch up

A few months ago I received a letter from my energy supplier informing me that my "account" was in credit to the tune of a little over £1000.

I wrote back thanking them for the information, but stated that I wasn't aware that my "account" with them was actually a savings account and could I, therefore, have my money back - with interest of course.

I heard back from them this week - not regarding my missing money, but to inform me that my direct debit is to increase once again. This started me thinking about direct debits and, subsequently, about banks in general.

I'm old enough to be able to say that when I first started work I was paid weekly in cash. I was actually in full time college (it would be "university" now), but every Friday lunchtime I'd hop on my little FS1E and tootle across town to the office to collect my pay packet - a little brown envelope with a see through plastic window through which one could discern various notes and coins and a (handwritten) pay slip.

It's worth pointing out that I was paid the princely sum of £16 a week back then, but after deductions and giving my mum a fiver for "keep" I was left with a little over £7 - if I'd been on the dole I would have got £9 a week! Nevertheless, unless it is something you have experienced yourself, you can not possibly understand the sheer joy of getting that pay packet every week - happiness was a little brown envelope in 1977.

My only expense (other than the exorbitant amount charged by my mum) was the HP payment on my second hand FS1E for which I put aside £3 a week. Once a month I'd tootle off to the local dealer where I handed over that month's payment in cash and the dealer would fill in a little payment book to record the transaction in meticulously neat handwriting. I still have the payment book somewhere in my loft. The rest of the money - all £4 plus some loose change - was mine to do with as I pleased.

It doesn't sound like a lot of money, but somehow I managed to be down the pub every night with my mates where we'd enjoy a couple of beers and a few games of darts. If I did run out of money before the next Friday it just meant that I couldn't go to the pub until pay day - never more than a day or two so hardly a disaster - and, of course, come next Friday lunchtime I was flush with cash again.

The point I'm making is that I didn't have a bank account or even have need of one. Unless you are someone who works in some trade where payment by cash is the norm, I'd guess that not many people these days are familiar with this concept of weekly pay in cash, but back in the seventies it was pretty much the norm for most working class people.

My mum worked part time for a small local printing company and was paid weekly in cash. My dad worked shifts at a huge, multinational corporation and was paid weekly in cash. They didn't have bank accounts either. In fact, my dad didn't actually write his first cheque until well into the 1990's after he'd retired!

Of course, my parents did have a mortgage and, therefore, a building society account - but that was it. Banks were everywhere on the high street - there were at least four in my local high street in the 1970's ... there is one now - but it didn't matter much that they didn't open until 10 AM and closed at 3:30 PM - we hardly used them. Occasionally they came in useful for paying a bill, but even that wasn't necessary - you could pay bills in post offices or even in some local shops. High street banks were generally places for local shopkeepers to pay their takings into - God knows what they do now!

The point I'm trying to make is that there was a time when for many of us - quite probably a significant proportion of the population of Britain at the time - banks were always there, but largely unnecessary for us. We didn't need "cash point" machines because we were paid in cash. We didn't need direct debits because we got a bill and paid for it with cash. If we wanted to buy something that we couldn't afford we either saved for it or, like with my FS1E, we paid cash in installments. We didn't need banks.

This all seemed to change in the 1980's when being paid weekly in cash fell out of fashion. Instead we were paid monthly by credit transfer. I was told this was "better" - but it didn't feel like it to me. For a start I'd lost that little bit of weekly joy that came in a brown window envelope.

I still got a brown window envelope, but now all it contained was a payslip - nothing like the pleasure one got from having the money as well. On top of that, my money now went into a bank account and the only way I could get that money was to go to a bank and withdraw it. I couldn't see how it was "better" then and I still can't see how it is better now - it might have been better for the employers and certainly better for the banks, but for me

The irony is that as banks became more and more essential to more and more of us the more they withdrew from the high street. If I want to get hold of my money I have to make a special journey to go and get it.

The banks have us over a barrel. My parents generation got by without ever needing them for the most part, but we have to have a bank account or we pretty much don't exist. This is why they treat us like scum rather than valued customers - we're not customers to them ... just revenue streams.

We're just numbered accounts that the banks and the various corporations that feed off them shuffle our money about with scant regard for whose money it is they are actually shuffling. It's all one big con to make us spend money we don't have and for them to accumulate money they are not entitled to - and I've had enough.

I'm getting rid of all the direct debits. From now on I'm going to pay bills by cash and only on demand. If my energy supplier sends me a bill I'll tell them to take it out of my "account". I have to have a bank account for my pay to go into, but I'm going to run it at bare minimum levels - I'm fed up of being treated like rubbish by unaccountable and uncontactable corporations - I'm going back to basics.

I only wish more of us would do the same. Only if we start standing up for ourselves can we force these faceless bureaucrats to come out of hiding and start treating us like people again. They think that because they've pushed us into a situation where we "need" them that we don't have a choice. The reality is that they need us more than we need them. Without us they have nothing and it's high time they realised this.

Join the revolution.


Anonymous said...

Already joined your revolution.... 3-4 years ago, yeah have to be paid into the bank but draw it all out on Friday and pay cash for everything. Curry's were a bit gob-smacked when I bought a fridge-freezer, so unused to real money it took 2 assistants to count it and then a call for a supervisor to check it.

Sean O'Hare said...

Good post Stan

Got me thinking. There are financial advantages (discounts etc) in paying by direct debit so I will have to work out whether I can afford to do likewise.

English Pensioner said...

The trouble is it costs you even more to pay the Utilities by cash or cheque which is why I succumbed. I did get my electricity DD payment down to a more reasonable figure by informing them that I would be contacting another supplier and asking them what monthly payment they would require for my particular consumption.
I would prefer to get a proper monthly or quarterly bill, and would be happy to pay by bank transfer using the internet.
Incidentally, when I got my first job where the employer wanted to pay money into my bank account, I didn't have an account, and my father had to formally introduce me to the local branch manager where he had his account before I was allowed to open my own. They weren't having every Tom, Dick & Harry banking at the Midland in those days!

Umbongo said...

Unfortunately, the disappearance of the weekly cash envelope can be laid at the door of the last genuine Conservative administration. When the Truck Acts were repealed (in about 1983) the obligation to pay weekly wages in cash disappeared and the pressure was on to pay everyone direct into their bank account (or, at worst, by cheque).

I tend to agree with you about reverting to paper bills and payments in cash. The problem is - when the system works - direct debits are so damn convenient (and cheaper too).

The answer to banks treating us like scum is to get genuine competition between banks. However, this is well nigh impossible given the extent and pervasiveness of regulation and general government interference (no don't start me on who was responsible for the recent banking fiasco). The only new bank created in living memory is Metro Bank which might be worth a punt to see if it is marginally less arrogant than the traditional shysters.