First Direct £10 monthly banking fee (merged)

Tim_L

MPH80 wrote:

There's no difference to a bank whether you are a stoozer or a rate tart. The stoozer still makes the bank money because, despite the fact the money has been borrowed, the bank still have it in a savings account and can lend it out again at a higher rate.

A rate tart, just like a stoozer, will move the balance again at the end of the term. The ONLY people who make banks money off an introductory offer are those who can't move it.

Capped fees were doing the job nicely of discouraging stoozer. There was no need to introduce uncapped fees. Yet they did - and they took hold - despite the 'fierce competition'.

According to the PWC report (i.e. the same report advocating fees), stoozing is costing card issuers and banks £600M a year - I think the cost of reclaiming unlawful fees is in the lowish millions from the last estimate I saw.

And obviously if a bank has already lent someone money at 0% they can't make money by lending it again unless the borrower deposits it with them. So I don't really understand the first statement.

Capped v. uncapped? Well capped is always a step towards uncapped. MBNA were very cautious in introducing fees of any kind - most people were initially exempt, then capped fees came in, and then they moved to uncapped. They will try to get away with whatever they think they can get away with - Martin puts this very well in his concept of an adversarial consumer culture.

MPH80 wrote:

Completely different issue. Whether or not the charges are lawful isn't the point - the point is they WERE being charged, they HAVE seen a drop in income and now we are discussing the consequences - not the cause.

Your point there is like saying that the solution to our problems in Iraq was not to go there in the first place. Well - we are there - and we have to deal with it (n.b. this is not a cue to discuss Iraq - just an example). Just like we have had charges - and now we have to deal with the consequences of them being removed and lowered.

But this argument is used by opponents of charge reclamation - the solution to losing thousands of pounds via small transgressions across an arbitrary limit is not to transgress in the first place!

This is money - if you accept the charges were unlawful - that was never the banks' in the first place, and it matters not a whit if the charges were in the terms and conditions, because t&c do not transcend contract law. The banks do now have to deal with the consequences of their boosting profits by taking money that didn't belong to them. If they can prove that the money reflected their cost structure and didn't boost profits then they can keep it and they won't have to fill in from other sources now.

But as I say, banks want to make these charges anyway but have previously been dissuaded from doing so by worries about losing market share. PWC (and I suspect this report was commissioned by the banks, though this is not clear) provide a nice set of excuses to make things previously thought unpalatable to be reasonable.

MPH80 wrote:

I'm still amazed you can't accept it's going to happen, when it is in front of your eyes. A&L already have an underfunding charge. Now FD have joined the fray. It's happening! The big difference here is that FD don't offer anything special with their C/A.

With respect, we are seeing charges from a small, expensive (to HSBC), niche bank, which are extraordinarily easy to bypass if you want to. But there are plenty of banks still looking for market share and the prospect of generalised bank charges is a long way off. Incidentally this is also Martin's view I think.

MPH80 wrote:

So you always pay full price for everything do you?

M.

No, but I don't expect to be subsidised by people in worse financial situations to me. I just shop around for decent deals. If it costs (for the sake of argument) a tenner a month over the value of the money I have on deposit with a bank to provide a banking service, then it's not unreasonable for me to pay that rather than some poor sod struggling with an overdraft.

going2die_rich

mo_rafiq wrote:

A lot of people are thinking that paying in £1500 a month will avoid the FD charge, it wont, you have to maintain an average balance of £1500 too, there is only 1 version of their letter being sent out, some people are interpreting it incorrectly!
.

I bet the interest rate on the account will be with the small print terms and conditions of "First £1000 gets x% interest, any amount above that get 0.01% interest".

So basically paying less than inflation on a a good chunk of the money. Speculation, but I bet it turns out true.

cheggers

crankup wrote:

All banks stink. They screw their costs right down by not having any true counter services at weekends (hardly any in the week either!), crap automated phone services, poorly administered web sites and then have the audacity to say they are struggling to make ends meet and impose arbitrary charges.


Simply open a savings acct. Fees avoided for the time being.
Or move to a bank where you have to speak to some awful Indian call centre?


Being a long standing FD customer, I will stick around - although I have a lazy eye on Nationwide atm too......!

What about moving to A&L, I can recommend you and you'd get £50

Long since closed my First Direct account, £10 a month to have a bank account there now just taking the p1ss

WestonDave

Copied from the FD website announcement on the new terms:-

Banking Fee Waivers

You will not have to pay the Banking Fee:

for any month in which you:
pay into your account* (otherwise than by internal transfer from another first direct account) a minimum of £1,500 or you maintain an average monthly balance on your account* in excess of £1,500 (month means calendar month and we will work out the average monthly balance by adding together the end of day balances for each day during the month and dividing that sum by the number of days in the month); or
hold a first direct Mortgage, Credit Card, Personal Loan, Savings Account, firstdirectory or a first direct car or home insurance policy; or
in relation to any second or subsequent Bank Accounts or Cheque Accounts in the same name. (If you hold a sole and a joint account, your joint account will not be considered to be in the same name as your sole account. If you hold two or more joint accounts, those accounts will not be considered to be in the same name unless all joint account holders are the same.); or
for the first six months following account opening; or
if your account is inactive for more than 90 days and the balance on your account is less than £10.
* Where multiple current accounts are held, account balances will be considered individually and will not be aggregated when assessing whether a fee is payable.

This clearly states that its pay in £1500 OR maintain an average balance of £1500 NOT BOTH!

going2die_rich

TonyOB wrote:

I recieved the letter on Monday.

The charge is £10 per name on the account as well. Whan I called they were quick to point out that our charge would have been £20 per month as it is a joint account. We have a savings account with them but that is only in my name so my wife would be subject to the charge.

Tony

Well it's obviously about making profits and not charging for it's costs of maintaining an account. As how can it cost double (£20) to maintain an account with an extra name on it?

I recommend Halifax online banking for all those switching.

Mc4ndy

I've banked with FD for 10 years or so, but have just recently decided to move to Alliance & Leicester. The decision was based on interest rates and products alone. FD are never at the top of the table for any of their products. The current account is ok, but nothing special, the e-savings again is ok but not special, plus they have the 1 month interest clause on withdrawals, their credit card is, again, ok but not great. Their mortages are ok but not the best.. foreign money is never the best rates either.

They have good a good call centre with well trained staff, and a reasonable internet banking. That said, I've spoken to them on the phone, I have the current account with £2.60 in it and the e-savings (another product) with £1.00 in it and I was told I would not incur this charge. So based on that anyone who wants to stay with them, but does not meet the £1500/£1500 could simpy open the e-savings and stick a quid in it! Problem solved!

They could always ditch paying for all their staff's Broadband connections...

farhad1965

Will I also have to pay £10/month?

I get paid every 6 weeks (not monthly) in excess of £1500, and once a month around £700. I have 3 savings accounts with First Direct and have about £5,000-£10,000 balance in these before transferring monthly to ICESAVE.

I have not had the letter from First Direct about the £10.00 charge.

Customer service has been superb over the past 13 years, 110% always.

Mc4ndy

cheggers wrote:

What about moving to A&L, I can recommend you and you'd get £50

Long since closed my First Direct account, £10 a month to have a bank account there now just taking the p1ss

LOL cheggers, they only have to go over to the referers board and see people on there will 'refer' and donate 99.999999% of their incentive payment too.

Sometimes I think some of them are actually running a 'loss leader' approach in there!

going2die_rich

Tim_L wrote:

No, but I don't expect to be subsidised by people in worse financial situations to me. I just shop around for decent deals. If it costs (for the sake of argument) a tenner a month over the value of the money I have on deposit with a bank to provide a banking service, then it's not unreasonable for me to pay that rather than some poor sod struggling with an overdraft.

I think you'll find that banks prefer the people struggling with their overdraft to "good" customers who never go overdrawn. More money to be paid.

You are already technically paying the banks for banking anyway as they take your money and lend it out to others at a higher charge and give you a small proportion back in interest. So really you'd be paying twice as their is no way they are about to increase your interest rates too.

I think anyone happy to pay a charge for banking is stupid, as you can get it for free now. Simply voting with your feet forces banks to back down as their will always be a few banks that won't charge which gains all the customers. It's like those daft people that never switched from British Gas since a decade ago. If you stay to be ripped off they will continue doing it.

The reason FD hasn't just charged everyone no matter how many accounts they hold is because it would collapse overnight if everyone switched.

If it's charging for holding only one account whats going to happen months down the line when they want to increase profits?

Someone get Martin to stick it in his newsletter to switch and recommend the other banks and watch FD collapse. That would have over 100,000 FD customers reading it and switching on it's own, without word of mouth kicking in.

sarahs999

See the news today. They've gone from being banking heroes to zeroes - I bank with them and my regular monthly income is over the limit, but i might close my account to make a point. They're penalising poor people!

So shocked by this. What's happened to them? Is this the first of the backlashes because of all the money they've lost through unfair bank charges being reclaimed? Reckon many more banks will follow...

Sarah