First Direct £10 monthly banking fee (merged)

Dagobert

lipidicman wrote:

do I
(1) Ditch them
(2) Get a savings account and put the minimum allowed in there

(2) will probably only tide you over over a short while if this is true:

SparciaM wrote:

I called to confirm all this. ... The lady advised that with a savings account I'm ok, but if I only put a nominal amount in it ..., the account would be reveiwed every 6-12 months and if so the charge would apply.

I asked how I could go about not paying and she said, become a regular saver each month or take out a credit card or loan. She advised with the CC I would need to spend on it every month not to be charged.

Other points to consider:

One of the criteria preventing the monthly fee is keeping a balance of £1500 in the current a/c [at virtually zero interest]. Bear in mind that that costs £75 lost interest compared to keeping the funds in a 5% account.

Alternatively, arranging a £1500 BACS transfer in and out once a month would cost £5 in lost interest only. Even less once same day transfers come into effect in 2007.

lozarcher

While I'm lucky enough to earn more than £1500 pcm, and therefore exempt from the First Direct fee, I am closing my account immediately upon learning of this change to their terms.

I'd urge everyone to walk the hell away from First Direct, whether they are within the scope of this fee or not, to teach them and other banks thinking of doing the same thing a harsh lesson.

We have a choice to accept the end of free banking or not.

I also think we should take an active stand to say that it's abhorrent for those earning less than the national average wage are clobbered, whereas those who earn more are not.

Shy_Ted

Well said loz

Ted

Mc4ndy

First Direct want to concentrate on their core customers. Those who use FD as their main bank and have more than one product with them. They have 40,000 dormant accounts and 250,000 that see less than 10 transactions a month.

So 290,000 people have realised their day to day banking etc is better off done somewhere else! True MSE'rs know already which banks products are best... and FD is not top of the table on any really. If FD had better products, then those who were financially savvy and aware of the products on the market would, I'm sure, switch to FD. Their main selling point is the 24 hour call centre and customer service being good, and this is at a high cost perhaps. But then again the 290,000 people who have these accounts but are not using them much won't be phoning up every day.

I think (hope) the fee will cause those customers whom they are trying to avoid closing the accounts, since they had already started banking elsewhere anyway, and the rest of their "core" customers, to wake up a bit see the headlines and have a look at what's on the market, hopefully realising that they might be better off going somewhere else anyway.

going2die_rich

crankup wrote:

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

That's what will happen, people will stay using the loophole of opening another account, then months down the line all banks will do the same charges. Then further still one will decide to charge them additional accounts and all will follow, leaving the customers with monthly charging accounts.

As soon as any charge for an account is in place, it'll be rolled out to the rest sooner or later.

Much better to vote with your feet now than just use a loophole because you are too lazy to switch.

IGK

I don't bank with FD, but am still surprised to see this announcement. It's ironic this is going on at the same time as the announcement in the news that the overhaul of BACS payments and cheque-clearing would save everyone money.
In fact I heard Ed Balls on the radio last night saying how (as if it was all his idea) the government was working with the banks to implement this change, and that it would in particular benefit lower-income families.
Well, lower-income families are precisely those who will suffer from current account charges if they do indeed spread beyong FD.
They give with one hand and take away with the other...

DontDoDebtKids

Just phoned them up and closed my current account, savings account, e-savings and ISA and transferred all the money elsewhere.

So long and thanks for the £75 in incentives to join etc. :wave:

Dagobert

While this thread is mainly focusing on the monthly Banking Fee, one should not overlook T&Cs, Part 2, 6 Borrowing:

An Arrangement Fee may be charged for a requested overdraft increase.

We may agree to provide you with another overdraft at the end of the term of your facility and, if we do so, an Arrangement Fee may be payable.

I would expect overdraft facilities to expire thus requiring new arrangement regularly.

HSBC's Charges

Overdraft Service

HSBC have changed their T&Cs similarly: HSBC's Overdraft Service is defined with exactly the same wording as FirstDirect's T&Cs, Part 2, 6.1.1.

The first requested overdraft in 6 months is free. Subsequent overdrafts cost £25.

Electronic Transfers

• Payments to HSBC accounts: branch £10, telephone free, online free
• Payments to HSBC accounts > £10K: branch £17.50, telephone £17.50, online free
• Payments to non-HSBC: branch £10, telephone free, online free

digp

First Direct’s announcement comes just weeks after the Office of Fair Trading said that it would investigate current account charges, prompting experts to predict an end to free banking.

http://www.timesonline.co.uk/article/0,,2-2453714,00.html

(Even if the OFT cap bank charges that will not necessarily make them lawful! (what planet are the oft on?)

digp

michaelgeoghegan AT hsbc.com

is the email for CEO of HSBC

in case anyone wants to write to him