First Direct £10 monthly banking fee (merged)

MPH80

Tim_L wrote:

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.

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'.

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.

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.

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).

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.

But your point about PPI is a good one, to an extent, in that there is a lowering of income from PPI. But there's a big difference between Banks being taken to task for misselling insurance (which is REALLY what the OFT are ruling on) and the fact that the charges, which were clearly laid out in the summary boxes and T&Cs are being forced to be lowered.

You can charge what you like for PPI - providing the person understands what they are signing up for and that it will actually do something for them.

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.

So you always pay full price for everything do you?

M.

pensioner_margaret

I have got the letter from FD today and am incensed by it. I have read Martins pages for several months now (but just joined forums today) and moved my life savings a while back.
I kept just £1 in a FD Bonus Saver just in case their rates got better. and I am thankful I did because that is the only reason the £10 a month charge wont be applied.
I have had an FD current account for 10 years and my pension income totals a bugs whisker over £1000 a month (better off than most pensioners I know).
Even though they (condescendingly) are not going to charge me I will be moving my current account very soon, because I object to current ac charges in principle.
My 'nest egg' is with All & Leic - I have phoned them and they have reassured me that they do not propose to begin levying similar charges as FD.
So it is likely that they will get my current account.
I post here because I would like to hear if anyone has heard different - I dont trust banks anymore and dont want to go through the hassle of switching only to get current ac fees slapped on wherever I switch to.

seven-day-weekend

Hello Margaret and welcome!

I'm sure if there are any other banks bringing in charges you will hear it here first!

greenstreetprince

Dagobert wrote:

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

I think you have a point, but the key word in your post is "so-called".

Many who claimed their charges back were genuinely hard done by, gone overdrawn once in a couple of years or maybe even just once in a lifetime, and maybe that too was because of a difference of a few days between a DD going out and income coming in, but the system slapped on the OD fee and charged them the interest for amount of time they were overdrawn.

I have sympathy for this type of customer, they dont ever mean to be overdrawn, but !!!!!! happens, no one is perfect.

then there were those who claimed back charges even though all they've ever done all their lives is live an overdrawn fantasy, couldn't control their spending, yet still felt it was the banks fault. suddenly when this site and articles in other media told them they could get those fee's back (in affect a reward for their financial ineptitude) they rushed into the craze.

I feel its these people who are mainly (not totally) to blaim for banking charges being introduced. the banks paid out hundreds of thousands of pounds to customers who knew penalties will be imposed for going and staying overdrawn.

I dont buy into the argument that a fee for going overdrawn is ridiculous and it should be paid back. it may well be very high, and diproportianate to the actual event, but hey if you dont like it, go to a different bank, you are responsible for finding out which banks charge what, simply choose the one with fewer or lower charges. and above all, if you cant control your spending in a sensible manner, tough luck!

you cant expect the banks to just sit on their backsides, paying out these sums back to their customers, watching the money disappear from their grasp and not do anything about it.

anyway, i'll just be opening an eSavings account with them to ensure i'm not charged the £10 fee. I'd hate to leave them as they are very good, but not worth £120 a year!!

going2die_rich

Voyager2002 wrote:

In practice, you just need to transfer some money from FD to another bank, and then back into FD.

Or switch to a bank that doesn't make you jump through hoops to keep YOUR money with them without a charge.

They actually use your money to lend to others hence the reason they give you interest to intice you to give it to them and not keep it in your sock draw!

I recommened Halifax for good online/branch banking and A&L for it's regular saver.

Dagobert

What's the big fuss here if the banking fees can be avoided simply by opening a savings account with £5?

trets77

i called FD again just to check that our Joint current account would not be hit with this fee and was told that because we have a joint savings account we would be okay.

although she also said they had not been told if there is no min limit on how much funding needed to be in there. this could be a problem as we only use the Joint savings accounts a easy way to pay in funds in branch ( the % rate is criminally bad!!!!) before moving it along to the E-savings.( which need to rise above 4.75% sharpish if wants my savings to stay !!!)

she also sassed me with the idea that all banks might start charging fees soon, so stick with us you will be better off in the long run.

i do already pay a £10 fee on my Lloyds TSB platiunum account but i get a lot for it i.e Travel Insurance, AA breakdown cover , Mobile phone Insurance, Sentinal card protection for all my cards and discounts on various shopping and services. i would not recoomend this bank acount unless you make FULL use of ALL the services available. i was considering moving it to FD as i have not always had a phone worthy of insurance but i will stay put now.

better the devil you know in these uncertain circumstances until the dust on the whole charging for current accounts thing settles down :rolleyes:

greenstreetprince

Dagobert wrote:

What's the big fuss here if the banking fees can be avoided simply by opening a savings account with £5?

the fuss is over whether this is going to be a regular pattern with other banks too.

and who knows what the future holds, maybe this will become the norm like it was in the old days (i wasnt around then!) where all current accounts are fee based, regardless of whether you have any other accounts with the bank or not, now that would be a stinker!

it is ironic though, the bank which killed fee based accounts in the olden days (Midland which is now HSBC) is the same bank looking to re-introduce them through one of its off-shoots.

belleabi0405

Dagobert wrote:

What's the big fuss here if the banking fees can be avoided simply by opening a savings account with £5?

Look at the bigger picture. They are paving the way for fees to be standard as has happened with balance transfers and is soon to happen with credit cards themselves. I think they are at first trying to entice people into taking up more expensive options rather than putting £5 into a savings account and that won't harm profits and then when everyone's used to the idea of fees with exemption, they'll introduce universal fees. It wouldn't surprise me if the First Directory charge becomes a blueprint for a monthly charge. We'll offer you some great services you'll probably never use for a monthly fee of £??? It's only a matter of time and lets not forget that they are a subsidiary of HSBC so watch out anyone with an account with HSBC.

I'm becoming more and more cynical.

Dagobert

Dagobert wrote:

What's the big fuss...?

dameon1024 wrote:

Look at the bigger picture. They are paving the way for fees to be standard

greenstreetprince wrote:

the fuss is over whether this is going to be a regular pattern with other banks too

I agree with you both. My comment was targeted at those who were talking about closing the account instantly, judging by some reactions maybe even without having read the T&Cs.

I am not advocating to pay for an account but if a charge can easily be circumvented and if I have a use for an account I wil not cut off my nose to spite my face.

If fees are going to be introduced there is nothing we can do. All we can do is play the system to our advantage.

dameon1024 wrote:

they are a subsidiary of HSBC so watch out anyone with an account with HSBC

HSBC are trying a different tack: the account is free to have but the customer has to pay for an agreed overdraft. zero o/d - zero fee.