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

dhug

Well I will still probably stay with them for a number of reasons.
The UK call centres to me are worth paying for alone, I have always found them to be first class at customer service and that is worth a lot for me.
Of course it will depend on the exact details of the charge and how it is calculated I have a current account, savings account, e-saving and am opening a mini ISA with them as well as getting some of my insurances through them.
As for bankcharges, well I dont think you can eintirly blame either the customers or the bank. The bank is a buisness there to make money and sometimes people do over their limits for reasons beyond their control and the high level of charges can be enough to tip people into the charges trap where the charges for one month lead to more the next month and so it goes, I know it happened to me and it took months to get out and all because the inland revenue computer threw a wobbly I went from never being overdrawn to being in a spiral of charges. That is purly because of the high levle of them if they were set at a more realistic figure then I would have no sympathy at all for people who incurred them. SO if banks are feeling the pinch (which I somehow doubt) then they have to look at their own practices and not just blame the customers

newfoundglory

CopperPlate wrote:

I suppose this could be a pre-cursor to any action over bank charges? They've already had to reduce their 'charges' on accounts. Could be them lining up to say "okay, you've got your cake and you've even managed to get a bite, but you're not going to get to finish it...here's a ten pound charge for the privilege of having a current account with us...sorry, don;t like it? Tough."

I have to agree with CopperPlate. Technically, no banking is "free" despite what banks would like us to believe. And there isnt such thing as "fee-free" banking anyway, you end up paying for it one way or another.

Most other countries around the world charge for banking services, America is a good example.... where you will pay for transactions and services, unless for example, you keep a minimum balance with the bank.

If First Direct dont do this right, it would be nothing short of corporate suicide. And i would have expected annual charges on Credit cards within the banking industry to begin with rather than current accounts.

M_Thomson

I wonder if it is HSBC in general rather than just First Direct, that will start doing this?

CopperPlate_2

Tim_L wrote:

Is the idea of YOU actually paying for the costs of your banking so bad? Since it would appear the alternative you are suggesting is that it should be paid for by people in marginal difficulties?

General charging for current accounts is not going to happen any time soon. Banks would love to do it, which is why they are starting to try to offer 'premium' accounts you 'upgrade' to and which bear charges. But the sector is far too competitive for this to become generalised.

I have no problem paying for something that I use. You seem to be under the impression that I have a problem with this? From my post I thought it was quite clear that should you transgress the 'rules' (i.e. your OD, etc...) then you should expect to pay a penalty. Banks use current accounts to attract customers and hope to cross-sell other products which will make them the money. People who run their current account properly and don't go overdrawn don't make the bank money and actually end up costing the bank in the long run to provide the service.

I'm not suggesting any alternative - and certainly not one where the less advantaged end up supporting the better-advantaged. In the end, banks make a hell of a lot of profit from activities outwith current accounts, so lets not get too hot under the collar defending those people who have paid charges in the past, for whatever reason. I simply said my 'sympathies' (and I deliberately didn't call it that in the original post at the risk of sounding patronising, but since you asked anyway, I'll call it that now) lay with those who had been charged penalties through circumstances (financial or otherwise) that were outwith their control. For those who had it within their control to avoid the charges, I don't have sympathy and if their money is supporting those who do run their account within the limits, then that's just one of those things.

You seem very sure that banks won't start charging for the basic services.

CP

Tim_L

I have never suggested people in any sort of difficulty should pay tons of bank charges. I think a bank should be sympathetic. However, a high amount of people who claim back these charges are not in difficulty, they just don't manage their money properly. They are part of the ever increasing it's everyone else but my own fault brigade that is taking over this country

What a load of sanctimonious twaddle.

Firstly you don't know who these people are. To make a generalisation this wide about people you don't know is breathtakingly arrogant.

Most people reclaiming bank charges are (a) in marginal financial difficulties, or (b) not sufficiently savvy to manage their finances. Neither is a crime, but they are paying in some cases thousands of pounds a year. It is quite simply morally unjustifiable to expect free banking for other people to be subsidised by people in difficulties. There may be a small number who abuse the system, but frankly the effect of these charges tends to snowball and people do not like paying them - anyone with plenty of money who doesn't care about charges is probably paying a lot for credit card debt and so on. These charges disproportionately affect those in difficulties: if you are taking £1500 a year from someone earning maybe £9000 after tax, you are crippling them financially and whether or not they want to escape the charges they won't. No amount of finger wagging and holier-than-thou-ness alters the fact that if you take this sort of amount from people they will suffer.

And whether you like it or not, these charges are now pretty much universally regarded as being unlawful, so these people have as much right to getting their money back as you would if I was to take it from you unlawfully. So you can huff and puff all you like, but it won't make a jot of difference.

As regards charges on current accounts, well all that is happening at the moment is a sophisticated propaganda campaign by the banks so that people claiming these unlawful charges back are vilified by others. It won't happen, because if banks thought they could get away with it they would already have done it.

Oh and I am not naive.

CopperPlate_2

Tim_L wrote:

Firstly you don't know who these people are. To make a generalisation this wide about people you don't know is breathtakingly arrogant.

I think that you can only speak in generalisations here Tim_L. I don't think it's arrogant, I think it's being broad-brush and having an opinion.

Tim_L wrote:

Most people reclaiming bank charges are (a) in marginal financial difficulties, or (b) not sufficiently savvy to manage their finances. Neither is a crime, but they are paying in some cases thousands of pounds a year. It is quite simply morally unjustifiable to expect free banking for other people to be subsidised by people in difficulties.

Not wanting to stir this up, but you are talking in very generalised terms and you criticised the previous poster in fairly strong terms for doing the same thing. How can you possibly categorise those who are reclaiming bank charges into two categories only? Those in financial difficulties don't need sympathy from us, you, me or their bank. They need a decent wage and a bit of education on how to manage their money accordingly.

Tim_L wrote:

There may be a small number who abuse the system, but frankly the effect of these charges tends to snowball and people do not like paying them

Then manage the account properly and if you abuse the system, then you have to expect penalties. No-one likes paying for something when they don't feel they should.

Time_L wrote:

Anyone with plenty of money who doesn't care about charges is probably paying a lot for credit card debt and so on.

I don't care about charges - I don't get charged, and before I'm accused of being over-paid, I'm most certainly not. I just spend what I can afford and make sure I don't go over my limit. It's to the wire sometimes, but I just try my best. That's all I can do. Not blame someone else.

Tim_L wrote:

These charges disproportionately affect those in difficulties: if you are taking £1500 a year from someone earning maybe £9000 after tax, you are crippling them financially and whether or not they want to escape the charges they won't.

Yes, I'd agree with you on that point definitely.

Tim_L wrote:

No amount of finger wagging and holier-than-thou-ness alters the fact that if you take this sort of amount from people they will suffer.

I don't think anyone is finger wagging - folk don't need that. It's about trying to educate; and making sure the charges for any 'rule' breaking is fair and proportionate. If someone who was on limited income was being charged £10 a month, do you think they would think that was fair? Or would it be viewed as those on limited incomes supporting the 'rich folk' who could well afford the monthly fees? What happens then? Means testing for bank accounts to see what level of fee you should pay or can afford to pay? Sounds ridiculous but lets stop this "people aren't financially literate so it's not their fault if they end up going overdrawn,etc and paying charges". At the end of the day, most people who earn a regular wage know what they will take home at the end of the week/month and can spend accordingly. If you overspend, and effectively spend the banks money, you will be charged. I can't see what's so hard to understand about that concept.

Tim_L wrote:

And whether you like it or not, these charges are now pretty much universally regarded as being unlawful, so these people have as much right to getting their money back as you would if I was to take it from you unlawfully.

Oh, please. The charges are not regarded as unlawful - the level of the charges were held to be disproportionate to the cost of managing the debt/account/etc, so they level had to fall. The banks are still charging you for transgressions, just not so much. And 'these people' you refer to - again, a generalisation if ever there was one - don't have a God given right to get the entire sum back. I don't really think that you can compare a bank charge for going overdrawn to having your money taken unlawfully from you in the street, or raided from your bank account and to make that kind of glib comparison is insulting to those people who have sustained that kind of loss through, let's face it, probably no fault of their own.

Tim_L wrote:

As regards charges on current accounts, well all that is happening at the moment is a sophisticated propaganda campaign by the banks so that people claiming these unlawful charges back are vilified by others.

I think a little bit of perspective is called for on this. And a little less emotion.

Tim_L wrote:

It won't happen, because if banks thought they could get away with it they would already have done it.

But they've not had the sudden financial pressure that reducing charges has brought about and will no doubt bite in the future. Nothing can be ruled out I'd say.

Tim_L wrote:

Oh and I am not naive.

That was a bit unfair.

M_Thomson

Tim_L wrote:

What a load of sanctimonious twaddle.

Have I touched a raw nerve?

Tim_L wrote:

Firstly you don't know who these people are. To make a generalisation this wide about people you don't know is breathtakingly arrogant.

I am not generalising, I am simply reading through posts on reclaiming bank charges on this website. The majority of posts I have read are people who have claimed for charges that with better planning they could not have incurred. People who have lost their job, lost a loved one, are ill etc, should not be charged and banks should be sympathetic.

Tim_L wrote:

Most people reclaiming bank charges are (a) in marginal financial difficulties, or (b) not sufficiently savvy to manage their finances. Neither is a crime,

Never said it was. And I think you are generalising now.

Tim_L wrote:

As regards charges on current accounts, well all that is happening at the moment is a sophisticated propaganda campaign by the banks so that people claiming these unlawful charges back are vilified by others. It won't happen, because if banks thought they could get away with it they would already have done it.

Er, have you not read this thread? It looks like First Direct are going to start doing it. And probably others will follow. I have had several letters from various credit cards that I hold saying interest rates and fees are going up.

Tim_L wrote:

Oh and I am not naive.

I think you are slightly if you think charges and fees will not increase because of this.

trplumbing

...away from the arguments, back to the £10 charge...

it IS going to happen. Confirmed. How do I know? I know someone who works in the call centre (who, for obvious company confidentiality reasons I will not name).

What has been said so far is pretty much true - it will be announced in September, introduced in January. It is £10 per month, which may be levied dependent on what products you have. In fact my friend went into work today and there is a circular about someone breaking the confidentiality agreements, and there is now a script to give to customers (announced earlier on this thread).

Apart from the potential profits, the bank only want customers who have all their banking with them (the exclusive element) and if that means almost blackmailing them then thats fine. Think of the customers who currently have the convenience of their debit card and cheque guarantee card but who, creditwise, may struggle to get a similar account with another bank - would you take a solo card or something like that to avoid the £10 charge? Some wouldnt.

Recently the chief exec Richard Kimber suddenly left, no reason given, no planning. Also there have been other changes. Now that this has been announced to staff it appears this could be something to do with it.

I like FD, I like the internet banking, and the overall simplicity. In fact my main banking is with them. I like not talking to machines in call centres and the fact they are in the UK. BUT I cannot justify paying £120 per year in charges just for having the account with the bank.

I only have a current and savings a/c with FD and I have nothing elsewhere, hence I would have no way of avoiding the charge unless I moved banks. It is quite clearly a way of boosting the aggressive profit targets set out by HSBC.

I dont see FD supporting 2 UK call centres (Leeds and Hamilton) for a bank which will now lose a lot of customers. FD's usually targets wealthy customers (SE England) and has their main customer base there, however these type of customers will happily move their banking elsewhere if the bank so much as threaten to charge them. I reckon Hamilton will be the one to go as all they have in Hamilton is the Call Centre and Outbound (apart from the odd lending rep or similar). Leeds have Call Centre too, and have recently started doing Outbound AND in Hamilton the occupy a building with the HSBC CSC which could do with more room. FD have already given way to HSBC and HFC in parts of the floorspace in the building there.

I registered here only to respond in this thread and to absolutely confirm its true.

CopperPlate_2

Interesting. It all makes sense really, but I suppose now that the cat might be out of the bag, will FD start to make some public announcements to try and stem the tide of adverse publicity this might now generate?

Suppose we'll just have to wait and see what happens. As you say trplumbing - how can you justify £120 just to operate a relatively standard bank account.

Hereward

CopperPlate wrote:

As you say trplumbing - how can you justify £120 just to operate a relatively standard bank account.

Like anything offered to the public as "free" (for example the NHS) it is often devalued and assumed that as they are not directly charged for the service than it doesn't cost anything to run. Would you be happy to pay £120 per year if the bank informed you of the actual cost of running your account and that the cost was similar to the fee?