First Direct to charge £10 per month for current account

scootw1

climbgirl wrote:

I don't care about the shareholders either, but that's the only people the banks will answer to. Your questions are moral ones and right now the banks (and other businesses) don't give a damn about that! They care about the profits and the profits only. The growth in the organic food market shows that perhaps in time, these kind of moral and ethical will have more of an impact on the bottom line of companies (hopefully anyway!). BP Solar Ltd turned a profit for the first time last year, one of the first environmental energy companies to do so. Now that they can make money out of it, all the big energy companies are all over it.

I know I sound all doom and gloom but if you examine global banking trends in any depth, you'll see that fees are pretty much inevitable. I really hope we can stop it or minimise them by consumer power, but given the combination of general consumer apathy (not MSErs of course!) and the way the banks all seem to follow suit so quickly, I can't see it happening.

Like I said before, I'm just surprised that they haven't done it sooner given that most of them are global corporations and will be making profits from this in other regions of the world.

I agree with you. world is going to the dogs really isn't it? :rolleyes:

climbgirl

southernscouser wrote:

Well I think you're wrong! :rotfl:

I'm with Natwest and they haven't dropped their charges. Got a list through the other day. Think for the time being only credit cards have reduced the penalties.

Secondly, there could be a massive uproar in the way people are paid. At the moment the overwhelming majority of people get paid by BACS or whatever straight into their account.

Someone is bound to start questioning the legality of this when/if all banks charge for an account. It will go back to how it was before my time. They used to charge for bank accounts in this country but people used to also get a 'pay packet' in their hand.

Why wouldn't the same thing happen again? :think:

I hope I'm wrong! The problem is most of these banks are global coporations and are already making money from transactional charges in other regions of the world. So why not the UK? It stands to reason that HSBC (First Direct's owners) are the first to try this here.

The thing is, it's not illegal for them to charge for an account in the same way it is for the default charges that are being reclaimed. Those charges themselves weren't illegal, it's the extreme cost of them that is. The fact that they're wildly overcharging compared to the actual costs. And if you look at the overseas banking markets who already charge, the transactional fees aren't anything like this. They're pence as opposed to pounds to use an ATM for example. Much closer to the actual cost. And fully legal.

Alas!

DontDoDebtKids

I wouldn't discount consumer power too quickly.

Banks are owned by shareholders. Shareholders want to see that the bank is profitable and that the earnings increase over time.

If the bank chooses to charge customers for having current accounts and profitable customers move to other banks, then the bank may lose money. Then the shareholders will be angry. The policy will quickly be reversed. Consumers win.

If, however, only the customers that can't move (and, so, are forced to pay the fee) and/or are profitable (have lots of products so don't need to pay the fee) stay then the bank profits will go up. Shareholders happy. Consumers lose.

I say vote with your feet. I could have stayed with FD and taken out more products or even paid in the required amount per month. Instead I chose to vote with my feet.

ckerrd

southernscouser wrote:

Well I think you're wrong! :rotfl:

I'm with Natwest and they haven't dropped their charges. Got a list through the other day. Think for the time being only credit cards have reduced the penalties.

Secondly, there could be a massive uproar in the way people are paid. At the moment the overwhelming majority of people get paid by BACS or whatever straight into their account.

Someone is bound to start questioning the legality of this when/if all banks charge for an account. It will go back to how it was before my time. They used to charge for bank accounts in this country but people used to also get a 'pay packet' in their hand.

Why wouldn't the same thing happen again? :think:

I have always liked the idea of a pay packet. Loved it in my youth.

Interesting point you raise. If eventually all banks charge for accounts will people then ask employers to pay for an account for them to have their wages paid into.

As I have two "products" with FD I will be staying with them for now.
Will wait and see.....

southernscouser

climbgirl wrote:

I hope I'm wrong! The problem is most of these banks are global coporations and are already making money from transactional charges in other regions of the world. So why not the UK? It stands to reason that HSBC (First Direct's owners) are the first to try this here.

The thing is, it's not illegal for them to charge for an account in the same way it is for the default charges that are being reclaimed. Those charges themselves weren't illegal, it's the extreme cost of them that is. The fact that they're wildly overcharging compared to the actual costs. And if you look at the overseas banking markets who already charge, the transactional fees aren't anything like this. They're pence as opposed to pounds to use an ATM for example. Much closer to the actual cost. And fully legal.

Alas!

Sorry I think I've confused the situation.

When I said people would start questioning the legality of this I meant in that employees can only be paid directly into a bank account. As far as I'm aware there is no law that says we 'have' to be paid in this manner.

Why is it done? I guess it's cheaper for companies. They would have to employ people to physically count out cash, envelope it, deliver it in hand where as now it's all automatic. It's probably the preferred method by the government aswell for tax purposes.bSo not only will the banks alienate the likes of me and you they will also be putting thousands of companies backs up. The same companies that have business accounts with that bank. Are they gonna stay with a bank that is costing them more money?

If people vote with their feet I honestly can't see it taking off!

I'd be interested to know why bank account charges stopped in the first place? Anyone wanna admit to their age and enlighten me?

climbgirl

I really hope people can vote with their feet and stave this off (honest!). But the banking industry is one that reacts very quickly and non-competitively. Look at 0% credit cards for example. Six months ago it was very simple to find one that you could BT to with no fees. They're almost gone now. As soon as one slapped on a fee, the others followed suit.

I'm hoping that a few will see the benefits of attracting customers who do vote with their feet and will offer accounts with no fees. Fingers crossed! But I'm a pessimist when it comes to banks

ZTD

DontDoDebtKids wrote:

I say vote with your feet. I could have stayed with FD and taken out more products or even paid in the required amount per month. Instead I chose to vote with my feet.

Yes, vote with your feet. A bank must have a certain amount of deposits to cover its loans. At the moment that is 8%, but the regulators will start to sweat at 10%.

If enough people withdraw their deposits, the bank will be forced to shut.

That is the law.

climbgirl

southernscouser wrote:

Sorry I think I've confused the situation.

When I said people would start questioning the legality of this I meant in that employees can only be paid directly into a bank account. As far as I'm aware there is no law that says we 'have' to be paid in this manner.

Why is it done? I guess it's cheaper for companies. They would have to employ people to physically count out cash, envelope it, deliver it in hand where as now it's all automatic. It's probably the preferred method by the government aswell for tax purposes.bSo not only will the banks alienate the likes of me and you they will also be putting thousands of companies backs up. The same companies that have business accounts with that bank. Are they gonna stay with a bank that is costing them more money?

Ah sorry. I think you've hit the nail on the head with your two reasons though - it's cheaper and so the government can get their tax easily. Business accounts are structured quite differently from individual accounts, I don't have much direct experience with them, but I believe the fees are already a lot higher than on individual accounts. According to our finance guy at work anyway!

Besides, I like electronic banking. I don't want to get a great wad of cash every month!

ZTD

climbgirl wrote:

Besides, I like electronic banking. I don't want to get a great wad of cash every month!

You'd go back to being weekly paid. It's safer for the business.

pennylane99

theres an article on MSN Money about it....

http://money.uk.msn.com/Banking/Current_Accounts/Decision_centre/Better_Banking/article.aspx?cp-documentid=1273592