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

trplumbing

Re above

If the bank could produce a statement of how much it costs to operate my account, and it was similar, then why not. But they are a bank - they want profit profit profit!!

When considering my account:
1: I receive no paper statements or charges advice (get it online)
2: I phone once every two years at most (as I use the internet banking)
3: I have opted out of marketing, hence no promo mail coming through

I dont think my account would even be £5 per year to operate!!

Also the bank does make money when you call their 0845 number, and if you do request anything out of the ordinary then you are often charged for this seperately. And running two call centres is much less than a nation of branches etc etc.

CopperPlate_2

Banks have, up until recently, viewed current accounts as the equivalent of "loss leaders" - the bait to get customers in and then cross-sell. It is this cross-selling (esp in retail banking) that makes the bank money. Some might argue that the products they are cross-selling are not particularly competitive and are 'over-priced' for the return. Again, that is where the bank makes the money.

There is no such thing as a "free lunch" - but if we take it to the extremes of what I've read on this board, then it would mean we all paid for the services of what we use. Sounds like rampant capitalism to me - not that I'm averse to it - but then where does that leave those who can't pay. Without services or do we then need another bureaucracy to means test everyone?

Getting back on topic, banks make a heck of a lot of money from non-retail operations, which in turn support the retail side and the provision of services to the customer which, if it were to be provided on a pay-as-you-go basis, would cost everyone a lot of money.

You speak about £120 as if it were simply another outgoing cost. Some people couldn't afford £10 a month for what they view as a luxury - simply access to their money. And yes, we have the basic bank account, so those who need it can use it, just before I'm reminded. The culture of banks charging for current accounts is a new concept in this country, and the prospect of paying for it might take some time to sink in. If I had to pay for it, I would because I like my bank (smile), but I'd expect them to be hitting all the right buttons for that fee.

Mark7799

trplumbing wrote:

Re above

If the bank could produce a statement of how much it costs to operate my account, and it was similar, then why not. But they are a bank - they want profit profit profit!!

When considering my account:
1: I receive no paper statements or charges advice (get it online)

What about development and maintenance of the necessary programmes to allow you to do this?
2: I phone once every two years at most (as I use the internet banking)
Yes, but as the Bank don't know when you're going to phone they have to be available for you at all advertised times
3: I have opted out of marketing, hence no promo mail coming through
So no chance for them to make any additional money out of you elsewhere then

I dont think my account would even be £5 per year to operate!!

Also the bank does make money when you call their 0845 number, and if you do request anything out of the ordinary then you are often charged for this seperately. And running two call centres is much less than a nation of branches etc etc.

As has been quoted elsewhere on the boards, the current accounts are 'loss-leaders' hence why it was alluded early in this thread that FD wouldn't charge customers who had a lot of other products and probably were more profitable to them.

The Banks have had the capability to assess how much income each customer is worth to them for several years now and are probably likely to start acting upon that information. I expect fewer introductory freebies and tighter T&C's with them in the future. It may also be that customers will have to make choices between accounts - paid for accounts may offer 24-hour telephone answering, UK call centres, loyalty schemes etc - 'free' accounts may offer a lot less but you will get what you pay for.

trplumbing

Bearing in mind what you say, i think you mainly support what I am saying.

ie.
1: Yes they do have to develop programs etc, but it doesnt cost £120 per current a/c per year (i.e. over charging)

2: With my knowledge of FD they usually forecast their calls pretty well - if anything they are understaffed. Also as they make money from the 0845 number this point is negligible

3: Your right, no chance of making additional money. But if all I want is a current a/c and a savings a/c then why should I have to be charged in another way? My accounts do NOT cost £10 every month. Fact.

I have a good knowledge of how FD work, and they profit pretty well. Things like life insurance, text message banking and first directory make easy money for them, and then there is the usual loans/mortgages etc. However if the bank really could show me (accurately and not speculatively) how much my account costs to run then I would not mind at all paying something. But I know its not £120 per year. An additional £10 per month is a lot to someone like me...

equium

Why do you bank with first direct?

Simple...
- when you call, you go straight through to a REAL person EVER time.
- you speak to someone in th UK (Leeds or Hamilton)
- you have 24/7 access to your money - even Christmas Day or 00.01 on New Years Day
- simple, secure online banking
- free txt msg mini statements

I feel the list can go on and on...

The £10 a month, bank account charge will happen - but everyone has just focused on the negative side (which is easily done). The bank account will have better interest rates and lower charges - and it is also supported by a cashback incentive in relation to what products you have - a large proportion of customers will actually benefit...

tomstickland

I've got 5 current accounts including one with FD and would close any that levied charges. If all of the banks went down the charging route then I'd have to make some decision on which gave me the best balance of costs/benefits, though ideally I'd search out a fee free bank if I could.

I don't think FD offer anything that's any better than any of the other high street banks now that they've all got internet banking.

f3lix

equium wrote:

Why do you bank with first direct?

Simple...
- when you call, you go straight through to a REAL person EVER time.
- you speak to someone in th UK (Leeds or Hamilton)
- you have 24/7 access to your money - even Christmas Day or 00.01 on New Years Day
- simple, secure online banking
- free txt msg mini statements

I feel the list can go on and on...

The £10 a month, bank account charge will happen - but everyone has just focused on the negative side (which is easily done). The bank account will have better interest rates and lower charges - and it is also supported by a cashback incentive in relation to what products you have - a large proportion of customers will actually benefit...

How long have you worked for FD?

ironic

equium wrote:

Why do you bank with first direct?

Simple...
- when you call, you go straight through to a REAL person EVER time.
- you speak to someone in th UK (Leeds or Hamilton)
- you have 24/7 access to your money - even Christmas Day or 00.01 on New Years Day
- simple, secure online banking
- free txt msg mini statements

I feel the list can go on and on...

The £10 a month, bank account charge will happen - but everyone has just focused on the negative side (which is easily done). The bank account will have better interest rates and lower charges - and it is also supported by a cashback incentive in relation to what products you have - a large proportion of customers will actually benefit...

I agree with you. I am with first direct for all of those reasons and more. Also I'm sure if fd are introducing a charge there will be a benefit to the customer included somewhere. They have always been a fair bank. I'll have to ask a friend who works for them what the story is.

tomstickland

FD don't offer anything over and about what the other banks have IMO.

f3lix

ironic wrote:

I agree with you. I am with first direct for all of those reasons and more. Also I'm sure if fd are introducing a charge there will be a benefit to the customer included somewhere. They have always been a fair bank. I'll have to ask a friend who works for them what the story is.

You wouldn't work for FD by any chance?