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Banks raising charges on payable accounts
UK007BullDog
Posts: 2,607 Forumite
I did not see this mentioned anywhere in this forum. I was saying that this would happen but was ridiculed by my comments. Now we just have to wait for the others to do the same thing. Free banking as we know will probably be ending one day. It seems they are raising the fees for those who are "suckered" up anyways and are easy victims. the fact that the accounts are "enhanced" does notmean they are worth what one has topay for the "benefit".
Millions of bank customers hit by rises of up to 20% in account fees
Banks are forcing up fees on current accounts held by millions of customers ahead of a crackdown on rip-off overdraft charges.
More than four million people across the country have been persuaded to take out 'package accounts' on the basis that monthly fees provide a series of perks.
These are current accounts that charge a monthly fee but include a range of additional services such as free travel insurance, will writing and free breakdown cover.
Consumer group surveys have questioned whether the perks provide value for money.
Now, three of the biggest bank brands on the High Street are imposing even higher monthly fees on what the banks like to call 'Added Value Accounts'.
Last night, the groups denied the move had anything to do with their recent loss of a High Court test case over unauthorised overdraft charges, saying instead that the rates had simply not been increased for a number of years.
Lloyds-TSB is put up the fee on its Gold and Platinum accounts by £2 a month. The Gold account charge will rise to £12 a month and the Platinum one to £17.
Assuming the bank has two million signed up to these deals it will increase annual income from these charges by a staggering £96million a year.
Royal Bank of Scotland(RBS) and Natwest, which is owned by RBS, are introducing similar increases.
RBS and NatWest are increasing charges by 95p a month on the Royalties and Advantage accounts to £12.95.
NatWest customers with an Advantage Private account will see their monthly fee rise by £1.40 to £19.95 a month. Assuming the group has two million signed up to these accounts, it will be raking in an estimated £30 million a year extra.
Other high street banks and building societies are expected to follow suit.
The increases come at a time when the banks face a crackdown by the Office of Fair Trading(OFT) and the courts on unfair overdraft penalty charges.
It seems likely that charges of £25-£39 for busting an overdraft limit or bouncing a payment, such as a cheque or direct debit, will be capped.
There are signs that the banks are moving to counter the impact of such a cap on their income by pushing up other charges and interest rates.
This 'waterbed effect' occurred following an earlier move by the OFT to cap penalty fees on credit cards at £12. There has also been concern in the past that many thousands of people have been switched to these charging accounts without their consent.
Some finance industry leaders have indicated that the banks could begin to impose monthly fees on millions of customers who hold a current account.
There is a suggestion that people who not well off, including pensioners, could be first in the firing line for these charges.
This is because this group do not pay large sums into their accounts each month. This means this group do not provide a lot of cheap money for the banks to use to lend out at high interest rates.
Which? personal finance expert, Doug Taylor, said: "We have taken the view in past that unless at least two of the features in a package account is used regularly by a consumer then they are likely to offer poor value.
"Increasing the prices may mean that they offer even less value for money.
"We would ask consumers to question whether they are getting value for money."
Mr Taylor said it would be wrong for banks to react to the OFT action on overdraft charges by imposing account fees for the less well-off.
"Any attempt to impose charges on low income households would drive a coach and horses through the Government's efforts to increase financial inclusion and access to financial services," he said.
The banks denied the increases in charges were a reaction to the OFT action.
Lloyds said the charge is going up because it has enhanced the value of the package. It is offering a service to allow customers to keep copies of all the numbers stored on their mobile phones and is increasing the value of mobile insurance cover to £2,000.
RBS/Natwest said the 'modest price rises' fee reflects the inclusion of new benefits in their current account package.
The new features include improved car breakdown cover, enhanced mobile phone banking, better travel insurance and a facilty to get money out of a cash machine without a card. The user is given a special code to take out up to £300.
http://www.thisislondon.co.uk/news/article-23483118-details/Millions+of+bank+customers+hit+by+rises+of+up+to+20%25+in+account+fees/article.do
Millions of bank customers hit by rises of up to 20% in account fees
Banks are forcing up fees on current accounts held by millions of customers ahead of a crackdown on rip-off overdraft charges.
More than four million people across the country have been persuaded to take out 'package accounts' on the basis that monthly fees provide a series of perks.
These are current accounts that charge a monthly fee but include a range of additional services such as free travel insurance, will writing and free breakdown cover.
Consumer group surveys have questioned whether the perks provide value for money.
Now, three of the biggest bank brands on the High Street are imposing even higher monthly fees on what the banks like to call 'Added Value Accounts'.
Last night, the groups denied the move had anything to do with their recent loss of a High Court test case over unauthorised overdraft charges, saying instead that the rates had simply not been increased for a number of years.
Lloyds-TSB is put up the fee on its Gold and Platinum accounts by £2 a month. The Gold account charge will rise to £12 a month and the Platinum one to £17.
Assuming the bank has two million signed up to these deals it will increase annual income from these charges by a staggering £96million a year.
Royal Bank of Scotland(RBS) and Natwest, which is owned by RBS, are introducing similar increases.
RBS and NatWest are increasing charges by 95p a month on the Royalties and Advantage accounts to £12.95.
NatWest customers with an Advantage Private account will see their monthly fee rise by £1.40 to £19.95 a month. Assuming the group has two million signed up to these accounts, it will be raking in an estimated £30 million a year extra.
Other high street banks and building societies are expected to follow suit.
The increases come at a time when the banks face a crackdown by the Office of Fair Trading(OFT) and the courts on unfair overdraft penalty charges.
It seems likely that charges of £25-£39 for busting an overdraft limit or bouncing a payment, such as a cheque or direct debit, will be capped.
There are signs that the banks are moving to counter the impact of such a cap on their income by pushing up other charges and interest rates.
This 'waterbed effect' occurred following an earlier move by the OFT to cap penalty fees on credit cards at £12. There has also been concern in the past that many thousands of people have been switched to these charging accounts without their consent.
Some finance industry leaders have indicated that the banks could begin to impose monthly fees on millions of customers who hold a current account.
There is a suggestion that people who not well off, including pensioners, could be first in the firing line for these charges.
This is because this group do not pay large sums into their accounts each month. This means this group do not provide a lot of cheap money for the banks to use to lend out at high interest rates.
Which? personal finance expert, Doug Taylor, said: "We have taken the view in past that unless at least two of the features in a package account is used regularly by a consumer then they are likely to offer poor value.
"Increasing the prices may mean that they offer even less value for money.
"We would ask consumers to question whether they are getting value for money."
Mr Taylor said it would be wrong for banks to react to the OFT action on overdraft charges by imposing account fees for the less well-off.
"Any attempt to impose charges on low income households would drive a coach and horses through the Government's efforts to increase financial inclusion and access to financial services," he said.
The banks denied the increases in charges were a reaction to the OFT action.
Lloyds said the charge is going up because it has enhanced the value of the package. It is offering a service to allow customers to keep copies of all the numbers stored on their mobile phones and is increasing the value of mobile insurance cover to £2,000.
RBS/Natwest said the 'modest price rises' fee reflects the inclusion of new benefits in their current account package.
The new features include improved car breakdown cover, enhanced mobile phone banking, better travel insurance and a facilty to get money out of a cash machine without a card. The user is given a special code to take out up to £300.
http://www.thisislondon.co.uk/news/article-23483118-details/Millions+of+bank+customers+hit+by+rises+of+up+to+20%25+in+account+fees/article.do
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Seven million bank customers will see their fees rise by up to 20 per cent this month as lenders seek to increase revenues ahead of a ruling on "unfair" overdraft charges.
The Royal Bank of Scotland, NatWest – which is owned by RBS – and Lloyds TSB are all raising monthly fees.
It will affect those with "packaged" current accounts, which include extras such as travel and mobile phone insurance.
A customer with a Lloyds Platinum account will see their monthly fee increase by £2 to £17, while a NatWest Advantage Private account holder will face an increase from £18.50 to £19.95.
Packaged accounts have become popular in the past three years as banks try to persuade customers to buy as many products from them as possible.
Many banks fear that the Office of Fair Trading will cap the amount they can charge customers for going over their overdraft limit, and see packaged accounts as an alternative way of raising revenue.
Lloyds TSB, RBS and NatWest are part of a group of banks and a building society considering an appeal against a High Court ruling last month to allow the OFT to investigate overdraft charges on customers who exceed limits.
Banks charge up to £39 for exceeding an overdraft or if a cheque bounces.
Customers can be charged several times a day, with each transaction incurring another penalty.
Banks say if they have to cut these fees, they will have to raise money from elsewhere to fund "free banking" for the majority of customers.
It is estimated that banks make up to £3.5 billion in overdraft fees each year.
Lloyds TSB and RBS point out that the customers who already pay for their bank accounts have not seen their monthly charges increase for at least two years, and they now have additional benefits.
http://www.telegraph.co.uk/news/1939430/Banks-raise-account-fees-ahead-of-overdraft-charge-ruling.html0 -
Don't know why your comments were ridiculed. Seems obvious to me that this would happen.0
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Ah but such comments were, not least by Martin the Masterful0
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We've never had 'free banking' to start with : http://blog.moneysavingexpert.com/2008/01/22/why-a-bank-charges-win-doesn%E2%80%99t-mean-the-end-of-%E2%80%98free-banking%E2%80%99/Free banking as we know will probably be ending one day.Conjugating the verb 'to be":
-o I am humble -o You are attention seeking -o She is Nadine Dorries0 -
It is free for those who just want their wages paid into their account and who live within the credit in the account-who don't go overdrawn and want access to a debit card service to make shopping and spending money more convenient and safer than carrying large sums of cash around in todays society-so it is free to an extent. Charges come from services for borrowing, extra enhancements to a bank account and by spending money that you don't have. A well managed, basic account will always be free unless you want extras.Loan-£3600 only 24 months of payments to go!!!
All debt consolodated and cards destroyed!!
As D'Ream would sing 'Things.....can only get better'!!!0 -
Personally I'm of the opinion that banking services like cash withdrawals from ATMs and counters (not debit card payments, as the bank gets paid for them) as well as cash and cheque deposits should be charged for, maybe 10p/25p a pop up to a maximum of £10. The bank also charges £5 to open the account (which it holds as a non-withdrawable, non-interest paying deposit) and maybe £2.50 for a debit card, £2.50 for a cheque book, with the bank paying the BOE base rate at all times on all holdings in the account. Customers get more interest which offsets the charges somewhat, but nobody pays over a tenner, and the bank doesn't have to fleece its customers for fees. Win win as far as I'm concerned
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Agreed, then people will truly be getting what they pay for, if they need a cheque book, pay for it, it costs money to make and process, if you want a debit card, pay for it, it costs money to make and process, this is fair because if you don’t have to pay for it most will just treat it without regard, but if you have to pay for it then you will respect it more and it then tips the balance to a more level scale, remember if a bank pays you in the form of interest for putting your money in then you should pay them for tools to access it. take this analogy, you sign up your custom to a mobile phone provider, you get given ex amount of airtime for free, you get given a handset for free, some handsets you pay for, the least we could do is pay for our call's no?ShelfStacker wrote: »Personally I'm of the opinion that banking services like cash withdrawals from ATMs and counters (not debit card payments, as the bank gets paid for them) as well as cash and cheque deposits should be charged for, maybe 10p/25p a pop up to a maximum of £10. The bank also charges £5 to open the account (which it holds as a non-withdrawable, non-interest paying deposit) and maybe £2.50 for a debit card, £2.50 for a cheque book, with the bank paying the BOE base rate at all times on all holdings in the account. Customers get more interest which offsets the charges somewhat, but nobody pays over a tenner, and the bank doesn't have to fleece its customers for fees. Win win as far as I'm concerned
Since when has the world of computer software design been about what people want? This is a simple question of evolution. The day is quickly coming when every knee will bow down to a silicon fist, and you will all beg your binary gods for mercy.0 -
Who remembers when we did pay for our cheque books?
Actually it was stamp duty that one paid but it did mean you were careful in writing a cheque and were less likely to "waste" one.0 -
Well that’s it; fancy personal headed paper costs money doesn’t it.LittleVoice wrote: »Who remembers when we did pay for our cheque books?
Actually it was stamp duty that one paid but it did mean you were careful in writing a cheque and were less likely to "waste" one.
Since when has the world of computer software design been about what people want? This is a simple question of evolution. The day is quickly coming when every knee will bow down to a silicon fist, and you will all beg your binary gods for mercy.0 -
I only go back as far as having to keep £50 in the account to enjoy 'free banking' - around 1979/80 as I recall (but could have been a little later?) - with Yorkshire Bank.LittleVoice wrote: »Who remembers when we did pay for our cheque books?
Can't remember what the 'penalty' was for not doing so though.
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