Avoid First Direct - They are gonna charge all customers £10!

Paul_Herring

Hmm. Let me see....

Detail_Merchant wrote:

Loyalty reward
. Loyalty reward at the end of the year based on how much business you have with first direct

Move your cash ISA's over to us with their substandard interest rates! Move your mortgages over to us with their high fees and interest rates!

. Pay-back reward for recommending family and friends

Annoy friends and family by suggesting that they too put all their financial eggs into one basket! What's more if they do, we'll pay you even more!!!

Then they can annoy their friends and family by doing the same!! (Sounds a bit MLM to me.)

Tiered credit interest rates on your current account balance
. 0.50% AER on balances below £1,000
. 2.50% AER on balances £1,000 - £4,999
. 4.00% AER on balances over £5,000

Yes! If you have £1,050 in your account you'll get a whopping 2.5% interest rate on the excess £50!! That's 25 times more than xxx Bank! We even give you 5 times more on the first £1000!!!!!!!one!!

Free text message banking
. Receive free statements and alerts direct to your mobile phone

... until we decide to charge for this service when everyone starts relying on it (and our shareholders demand more dividends)!!!!!

Overdrafts and debit interest
. You would receive an automatic fee-free overdraft on £500
. The rate of interest on your overdraft will be 12.9% EAR
. There would be one overdraft arrangement fee of £15 to arrange an overdraft increase above £500 or if your agreed overdraft limit was exceeded

Since £30 was deemed to much for a penalty, we've reduced it by 50%!!!!!!!! You now only have to pay 1/2 as much to go over your overdraft limit!! Or, for a one off fee of £15 you could extend your line of debt!!!!!

Monthly banking fee
. You would pay a monthly fee of £10

And all this for the priuncly sum of £120 per anum. How could you refuse!!??!?!

<serious>
Frankly this doesn't seem at all attractive to me
</serious>

KTF

The worry is that when one does it the others probably wont be far behind - i.e. look what happened with the balance fee on credit cards.

Whilst people will jump ship initially, once every other organisation adds on the charge (which will probably happen over time) it wont make any difference who you bank with (unless everyone gets a basic account and starts paying in cash for everything I guess).

grex9101

mrcow wrote:

I know that many/most FD customers on this site will be jumping ship as soon as they get confirmation of all this (as to how worse off they'll be) and will be looking for the best deal for them.

That's it though.... People who use this site, are by definition the ones who WILL jump ship. The others WILL be more apathetic. Particularly if FD wrap up this charge in all sorts of lovely bonus things etc...

MPH80

mrcow wrote:

I know that many/most FD customers on this site will be jumping ship as soon as they get confirmation of all this (as to how worse off they'll be) and will be looking for the best deal for them.

As has been pointed out - the people on this site won't hang around.

But how many people in this country even bother to look at their bank statements? The answer is a frighteningly small number. I doubt many customers will even know they are being charged until someone else points it out.

westernpromise

Most of the BT fees are capped, however, so for serial stoozers the odd £50 here and there is not much of an issue.

Under the FD terms outlined above, someone with £5,000 in their account would get a weighted average interest rate of a mere 2.4%.

Over a year, that's just about £120 gross - uncannily similar to the cost of the monthly fee. Fancy that!

But that interest income is presumably taxable, so the customer with the £5,000 average balance would actually be paying for the privilege. Their after-tax interest would be £72, but the account fees would be £120, meaning they'd pay a net £48 a year.

I can't believe there are that many people who have that high a current account balance, and if they do, they'd be better off in a Flexaccount where they'd be getting 4.5% on it. After the tax, they're £180-odd better off than with FD.

I guess FD will try forcibly converting a few customers' accounts to this new, worse product, and see how many of them take umbrage and move their account elsewhere. If they mostly swallow it then they could then roll it out.

Let's hope Nationwide stick to their guns on this. It was NW who launched the first free account paying interest IIRC, back in 1987, when all the banks were charging for current accounts.

Murtle

Hmmmm, no much incentive to stay with FD based on that.....not even annual travel insurance thrown in..... but will wait and see what happens. I know there was talk of paying for a bank account but that's more then I spend on my hair in a year!!!!

EagerLearner

Hear hear Murtle - far better use for £120 rather than in their pocket for a pretty bad package!

CopperPlate_2

What if they were getting rid of FirstDirectory, their current incumbent 'premium' account or making changes to it? Potentially they could be reducing the charge for their premium account from £12.95 or whatever it is, to £10 a month. Unlikely I know...:rolleyes:

Murtle

maybe it's just to prompt people who signed up for the £50 to close their accounts and reduce their database sizes......

mrcow

Murtle wrote:

maybe it's just to prompt people who signed up for the £50 to close their accounts and reduce their database sizes......

lol, but I bet it won't stop them from still sending out their four lots of junk mail per month to each of these ex customers :rolleyes: