First Direct to charge £10 per month for current account

livinginhope

I posted on the other thread running in the banking bit,but am going to say it again anyway :rolleyes: this to me is the bank's way of 'cleansing' out the poor.
We have a joint current account and DH holds one of their CC,but as I only have 1 product if we fail to put the £1500 in one month into the joint account,we will be charged the £10,that is just plain unfair :mad: ,I phoned them yesterday and was told not to worry as there has only been one month in the last year that £1500 has not been paid in,this was the month DH was made redundant,the month we would least have been able to afford £10.
The man on the phone said 'if you take out a CC madam,you have no need to worry' I just burst out laughing and said 'with my credit record' he asked what was wrong with it? they obviously haven't done a search lately :rotfl:
I told him that if I don't deposit £1500 then I will simply withdraw the amount needed to make it £1500,then deposit it back in,he said that wasn't allowed,I asked if they are now going to start asking what the withdrawls are for?,he thought for a while,asked someone then said yes you can do that.
I can understand a bank charging,but £10 a month does seem steep.
The reason for the charge is to stop accounts laying dormant,just because someone is on a lower wage,doesn't mean their account is laying dormant!
According to the TV this morning you have to earn £24000/year to not be charged.

DontDoDebtKids

southernscouser wrote:

What today? Did you tell them why?

Yup, this morning.

Transferred all my money elsewhere.

CS Rep asked why and I got on my high horse and told them. Hopefully lots of others will do the same and other banks might not follow. I'm not paying them £10 a month, or £120 a year, for 0.1% interest on my current account.

I don't really care that much about not using FD. I do care if other banks see what is happening at FD and decide to do the same. So, hopefully, lots of people will dump their FD accounts and move to better ones, such as A&L and other banks will keep their free current accounts!

climbgirl

southernscouser wrote:

I honestly don't think it will come to that. I'm not gonna pretend I know anything about the industry but look at it this way.

Lets say there are 20 banks. 19 of them charge for a basic account. 1 of them doesn't. All rates are competitive. Who would you bank with and which bank is gonna make the most money?

Sorry SS, but I think you're wrong about this. Sadly, I think bank account fees are inevitable in the UK. In fact, it's one of the only places in the world where they don't charge fees for basic transactions on bank accounts - ATM, withdrawals, hell even deposits in some instances! You can choose either a blanket fee or a per-item fee, it depends on the account you choose. When I moved to the UK 3 years ago and was doing my homework on which bank to choose, I was stunned to realise you didn't get charged fees on these kind of things!

Now that they've been told to lower their default charges to £12 and bad debt defaults are rising, they'll be looking to recoup that money somehow. And this seems a pretty easy option for them.

The first bank that tries it will get hammered but once one does, the floodgates will open and they'll all be in there. My guess is that this is HSBC testing the water with their subsidiary....People might vote with their feet, but sadly most won't. The article says that people are more likely to change their spouse than their bank account. The numbers of MSErs are a pretty small percentage of the country, alas.

I'm sorry to say it, but given the greed of banks this is inevitable. I give it two years, max before they're all doing it and its' become the norm. In fact, the only thing I'm surprised about is that they haven't already.

DontDoDebtKids

climbgirl wrote:

The article says that people are more likely to change their spouse than their bank account.

Well, FD are watching me wave goodbye :wave: and if any other bank that I bank with tries the same then I'll be off faster than you can say moneysavingexpert!

All the more reason to be DF!!!

JohnInDebt

climbgirl wrote:

The article says that people are more likely to change their spouse than their bank account.

DontDoDebtKids wrote:

Well, FD are watching me wave goodbye :wave:

Does that mean the OH is next :rotfl:

DontDoDebtKids

Well, if she slaps a charge on me of £10 a month if I don't spend £1500 on her every month then she may well be up for review!

PS JOKE - please don't kill me Miss.DDDK!

climbgirl

DontDoDebtKids wrote:

Well, FD are watching me wave goodbye :wave: and if any other bank that I bank with tries the same then I'll be off faster than you can say moneysavingexpert!

All the more reason to be DF!!!

Believe me, I'd be moving too if I had a First Direct account! I really hope that this can be stopped by people voting with their feet. But given the small percentage of MSE types around and given people's general apathy when it comes to things like this, I don't think it'll be enough to stop it. Sorry!

briona

climbgirl wrote:

Believe me, I'd be moving too if I had a First Direct account! I really hope that this can be stopped by people voting with their feet. But given the small percentage of MSE types around and given people's general apathy when it comes to things like this, I don't think it'll be enough to stop it. Sorry!

Ok, let's have some positives! The changes don't come into effect until 1 Feb 2007, which at least gives us some time to see if other banks follow suit [sadly, it's very likely]. Obviously they are just doing it to encourage [force] people to take out further products with them. If you find yourself in that position, their e-savings account looks like the best bet [£1 initial deposit and 4.75% AER – see link]. I would NOT take out a credit card with them as (a) it doesn't look like anything special and (b) there are rumours that credit cards will shortly be subject to an annual fee anyway, regardless of provider.

http://www.firstdirect.com/saveinvest/esavings.shtml

Personally I am going to hold fire for the time being because you could close all these accounts only to find that others charge more again. It's easy enough to close accounts but a lot harder to open them when you actually need to [speaking from experience here!].

FD are a subsidiary of HSBC [whom I also bank with despite their crap interest rates!], so it's logical to assume that HSBC will be applying charges to their accounts too – and given that they already compare unfavourably to FD, I would expect these charges to be higher again!

BlondeHeadOn

I bank with First Direct, and from what I heard on the radio this morning (and read online) the purpose of this charging is to sort out 'dormant' accounts, not to penalise existing customers. I'm self-employed so my income is high one month then low other months, but this will not result in me having to pay fees for my account. I also have a savings account and credit card etc. with them as well, so in no way a 'dormant' customer.

If they did start charging me £10 a month for my current account I'd be straight off to another bank - but that is not going to happen, according to the call centre person I spoke to this morning.

I suspect credit card companies might start putting an annual charge on their accounts again soon though - especially for those people who pay off in full every month and/or hardly ever use their cards .....

ZTD

cathybird wrote:

£120 a year is a lot. I hope this sort of fee doesn't turn into a general trend with the banks but if people keep successfully claiming late payment fees etc back then it probably will, since they try to make money any way they can

I think the Government will stamp on it. People will move to cash, and the problem with hand-to-hand cash payments is that taxes somehow seem to get neglected.