First Direct £10 monthly banking fee (merged)

K9cuddles

Hmm. I shall await my letter! If I get one I'm off! Infact I recommend the account to my mum so we got some free money, looks like I need to do a referral to A&L and make some more £££.

Tim_L

MPH80 wrote:

If this is the case - how have we ended up with uncapped BT fees on credit cards? Surely competition would have kept those fees down to 0?

Isn't this obvious? People were playing the system by stoozing in increasing numbers, not least led to do so by this site, so the marketing criteria for the promotions - buying people with a debt habit - was failing. There is no point at all paying £100 (or whatever the cost of the free money is) for a customer that just uses your introductory offer and then leaves the account dormant or closes it.

By putting a BT fee on you get people who are genuinely in debt and who are trying to get the debt more cheaply. You remove the differential between savings and loan and make it much more difficult to make money from.

Banks claim that their charges reflect the cost to them of transgressions over pre-arranged overdraft limits. If this is true then there is no question of this money cross subsidising the cost of personal banking. So whatever PWC are saying - and presumably they have been set up by banks to do this report - the fact of the matter is that if the reclamation of these charges is costing the banks profit then they had no right taking it in the first place. They are entitled to costs and nothing more.

The other point not mentioned from the report is that the banks are also being hit by people not taking up overpriced CC Insurance (also subject to an OFT ruling). So are people really saying that we are wrong to decline this too because it is leading to charges on current accounts (if we accept this is what is going to happen, which I don't personally).

There's a good principle which is that it is fair to pay yourself for a service you use. First Direct has an expensive CS operation, which people value: fair enough, but there is a cost attached, and probably HSBC would like to increase the return from this division. But there will always be lower cost options, and there will always be banks at the lower end, particularly the former building societies, who will target any mainstream bank foolish enough to overcharge. UK banking is viciously competitive, which is one of the reasons why the banks like to make money from unlawful charges and from bad value insurance: most other countries have nothing like the free banking services we enjoy.

WestonDave

The real question which needs to be asked is this - First Direct risks driving away customers with just a current account and only £1499 (or less) income per month - can any other bank make money on those accounts without charges?

If the answer is yes then that bank will happily go on taking those accounts but I suspect the answer is actually no and that FD have set their waivers at that level deliberately. FD may have an expensive UK based customer service operation but they don't have any branches so are probably not significantly more expensive in cost base than most others.

If this works FD will rid itself of a load of time wasters and accounts which cost money thus improving its profits. That can either be used to offset any lost income from charges, and/or be used to improve its products thereby attracting good customers from other banks.

That isn't sustainable for the competition in the long term as they will be picking up the customers FD is losing, and losing their better customers to FD.

The real victims in this will be the lower income family that managed their money well and never incurrred charges and never paid anything for their banking. Their subsidised free banking is about to come to an end!

trets77

i thought this had died but i guess not.:mad: :mad: and i just posted a remark about it on the new Credit card fee thread without reading this.

My wife currently has a fairly new FD current account , plus we have a joint current account and a E-savings account with them with £5000 in it. i think this will save us from the dreaded charge ( i.e We have other services with them)

my wife will be a little bit short of meeting the £1500 criteria but we could easily make it up a simple transfer of money from a Joint current acccount. as for the money going into the joint current account it is not going to be possible to make £1500 a month as well unless a little back and forth moving around of cash works


no letter here yet so i wonder if they are targeting inactive accounts ect ?? if so i will stay as i do not consisder this unfair under the circumstances. if you are not using it why should you be worryed about losing it ??

if there is even a chance of us getting hit by this £10 we are off like i threatned them we would be and i,m taking my 5K savings with me !!! . i am not paying them £120 a year even if they are First direct.

Such a Shame i really liked them as well but i like my £120 more !!! i was going to move my sole current account from Lloyds as well but i,m shelving that now

i said before "what get's broken here does not go back together " we will not return if we leave and they will have lost us for life .

also with last weeks interest rate hike i want to see the E-savings rate go up as well this time .5% is not unreasonable !!!!

Hubert_Dalrymple

Dagobert wrote:

Thank those who are claiming back so-called unfair bank charges. Now we have the pleasure of subsidising them.

I'm sorry, but that's legally, factually, morally and logically wrong. It is the people who have been paying penalties who have been subsidising others to enjoy free banking. You only need to ask yourself what the banks would do if none of their clients ever defaulted and therefore no penalties were incurred by any client. You could not argue that it is unfair that you had to pay for banking because no other clients ever defaulted.

Another client defaulting does not in any way have any impact on the cost to the bank of running your account. The only account that will cost slightly more to run is the defaulter's account. The bank is perfectly entitled to recover their reasonably incurred costs of dealing with that default. What they must not do is make a profit out of that default or to use the surplus to offset shortfalls elsewhere in their system.

Don't blame those who have been unfairly penalised because you are now finding out just how venal and avaricious banks really are.

newlywed

Yes I agree. I've been happy with them for years but don't plan to pay them £10 a month if I can go to another bank.

Might be off to A&L yet....

Just waiting to see if I get a letter from them now.

trets77

Nationwide will be getting my custom if a letter arrives

. the Telephone service may not be anything like as good as FD's but that Free cash withdrawals abroad thing tips the balance for me.

might give them a bell when the wife comes home . no fee we stay. fee and it's goodnight FD.

pinkfluffybabe

pfpf wrote:

i think the idea is:

you have to fund with £1500.00, but your total income eg. is £1000.00. so you are short by £500.00. so send this £500.00 to another account(from your £1000.00 balance) or even withdraw it in cash. then deposit it back to FD and technically you have funded your account with £1500.00.

doesnt have any relevance to you now, as you have closed the account. i hope it may help others

Good idea, but not always easy if you have bills coming out on certain days and you need the money in the account.

trets77

got told ( eventually) that we won,t be charged due our use of the accounts . guy on the phone said a letter should be on the way with full details. he claims it is only £1000 a month needs to be deposited which is what that A&L account requires.

not happy but i cannot leave in protest for people who are not using or are stoozing only from their accounts. any other bank i would but i like FD.

it is still a GIGANTIC leap from this till the end of free banking ( which i very much doubt will float.


as for Banks i say " a plague on all your houses !!!" only sex offenders and terrorists have a worse reputation in the public mind at the mo it seems.

seven-day-weekend

pfpf wrote:

i think the idea is:

you have to fund with £1500.00, but your total income eg. is £1000.00. so you are short by £500.00. so send this £500.00 to another account(from your £1000.00 balance) or even withdraw it in cash. then deposit it back to FD and technically you have funded your account with £1500.00.

doesnt have any relevance to you now, as you have closed the account. i hope it may help others

Thanks, I see what you mean now. As you say it may help others.

I have taken my £46 elsewhere!

I don't know why some people are saying that if you don't 'use' the account you should pay for it. Why? It doesn't cost £10 a month for them to keep my £46, does it?