First Direct bank..to charge £10 per month for current accounts

[princess jane]

i've had a letter from FD this morning, seems to be a circular, saying they are introducing banking fees for all customers who do not have at least £1,500 per month coming into their account, and a £1,500 balance at all times.

 

Is this a reaction to us claiming back bank charges?

 

The letter seems to suggest so, although I haven't read it fully.

 

Not to worry, the plebs closed my account today, which never had £150 in, never mind £1,500, so not to worry.

[Guest ian cognito]

I had this too, althugh I pay in more than that a month, it's or maintaining the balance at £1500 so thats not too bad for me at least

 

S.A.R - (Subject Access Request) going off tomorrow (wasn't gooing to bother with FD because I find them so good (or at least I did)

 

Back to the co-op!!!

 

Will HSBC follow suit, my son has no chance of doing this, although I suppose all will follow suit in time.

 

Just noticed the letter has a reverse side which says they are changing the overdraft services. You will not now be going into an unauthorised overdraft (ie breaching your T&C) instead you will be making an informal request for to extend your overdraft, f they agree, the overdraft will be in place for 31 days, you can do this once in any 6 month period (I think, not clear) but if you make additional requests you will be charged £25. they will still charge a returns fee for an unpaid cheque, standing order or direct debit but are changing the way they charge the return fee (hang on have to go to the booklet now)

 

Interesting bit:

 

penalty fees (as they are now)

bounce up to £0 - free

bounce up to £25 - £10

bounce above £25 - £25

 

Now why this is interesting is because these charges are supposed to reflect their costs, could a bank staff member please advise if and why a £50 returned direct debit costs more than a £10 one, and if a £10 one cost nothing, why does a £50 one cost???

 

Sorry it was a long post but it was a long letter - lets see what the others do now.

[david.m]

thanks to Gareth at cable forum for posting the link

 

i guess that means screwing over every single person that gets some state benefit

and is on low payed job and the rest upto the figure at least, thats a hell of a lot of people in this country.

 

BBC NEWS | Business | First Direct to end free banking

 

"First Direct to end free banking

 

First Direct says it is costly to maintain some accounts

 

First Direct is set to charge bank customers with less than £1,500 in their accounts, effectively ending the principle of free banking.

It is proposing to charge people who only have a current account a £10 monthly fee, potentially affecting up to 195,000 customers.

 

The fee will be waived if customers open a savings account or buy products such as home insurance or loans.

 

The bank said the move was aimed at dormant or rarely used accounts.

 

Primary customers

About 40,000 of its basic accounts are not used at all while a further 250,000 accounts see fewer than 10 transactions a month.

 

The new charging structure, part of an overhaul of fees for accounts and overdrafts, will come into effect in February.

 

I want to focus our efforts on our most important customers

 

 

Chris Pilling, first direct chief executive

 

 

First Direct, the UK telephone and internet banking arm of HSBC, will write to all its 1.3 million customers to let them know how they can avoid the £10 charge.

 

The fee will apply to those paying less than £1,500 into their account each month or who have an average monthly balance below £1,500.

 

"I want to focus our efforts on our most important customers: those who use us as their main bank or who have a number of products with us," said Chris Pilling, First Direct's chief executive.

"Many of our customers do not enjoy the full benefits as they use us for a secondary account." First Direct said it believed 85% of its customers would be unaffected by the charges.

[zxzx]

The list of products required to avoid the fee are;

"hold a first direct Mortgage, Credit Card, Personal Loan, Savings Account, firstdirectory or a first direct car or home insurance policy;"

 

There are other ways too.

 

All the details can be found at first direct legals - changes to your account

 

There are many other changes too. See first direct legals - changes to your account for the full details.

[sharpblue]

FIRST DIRECT have announced that they will start charging a fee of £10 per month for all their customers who have £1500 or less in their current accounts from next March (2007) as announced on GMTV this morning.

 

They say it is to target 'dormant' accounts, yeah right. Time to find a new bank guy's

 

Let the migration begin!!!!!!

[Guest ian cognito]

Further details here:

 

http://www.consumeractiongroup.co.uk/forum/first-direct/46597-fd-react-bank-charges.html

 

Once again its the low paid and skint that are paying the price.

[BankFodder]

I think that this is a big toe in the water. HSBC and all the others will be watching to see how it is received.

These charges will spread to all customers eventually and in all banks.

 

HSBC has decided to launch this bitter pill and to attempt to sweeten it by using its most popular baning operation as a sweetener.

 

I suppose that the banks are looking at the end of the penalty charges cash cow and are wondering how they can keep their annual profits at the £33 billion per year mark (HSBC - £11.8 billions last year)

 

As usual it is the most vulnerable who will be caught in the rush.

 

However, I have to say that The Consumer Action Group is concerned with unlawful bank charges - and unfortunately there is no law to prevent legitimate charges.

 

I suppose that one has to appeal the the banks' moral sense of duty - and I haven't noticed one so far.

[bottomburp]

deleted

[Jimbo44]

The thin end of the wedge for many?

[dave]

...but the point is, it's no longer a penalty for breaching the T&C's (or so they think), so therefore, they can charge what they like as it's a "service".

 

It's called 'cloaking a penalty' and I suspect that their lawyers are feeling very happy with themselves - however, it doesn't change the fact that it really is a penalty and I think any judge would see it straight away and would most likely feel insulted that they thought they could 'hoodwink' him/her that easily.

 

Business as usual ;-)

[Bookworm]

3 threads merged, all dealing with same issue.

[curtlyb]

If you don't like it, close your account, i will be in February

 

Me thinks FD are shooting themselves in the foot, for god's sake, they must have the lowest overheads of any bank, they've no branches

[livelylad]

This was discussed on GMTV this morning.

[Bookworm]

FD is my parachute account. As it happens, I haven't needed it, none of my claims resulted in account closure.

 

I'll be closing my account with them in January, and making sure I tell them why. I suggest anyone who does the same lets them know very loudly and in no uncertain terms that this is the reason. This is a chance to get our voices heard.

[Guest ian cognito]

Not sure about the changes to penalty charges as they will still exist at up to £25 for returned cheques/DD's etc. They have only done away with the unauthorised overdraft charge. By graduating 'returned' fees, are they not making it more obvious that their fees don't reflect their charges i.e. how can it cost to return a £50 dd but not to return a £10, unless they are going to start processing these larger fees manually?

[dave]

Not sure about the changes to penalty charges as they will still exist at up to £25 for returned cheques/DD's etc. They have only done away with the unauthorised overdraft charge. By graduating 'returned' fees, are they not making it more obvious that their fees don't reflect their charges i.e. how can it cost to return a £50 dd but not to return a £10, unless they are going to start processing these larger fees manually?

 

But you are missing the point.

 

There is no unathorised overdraft now. I.E. there is no breach of contract, therefore negating the need to *only* recover their costs. No breach of contract, no penalty clause for a breach. It's now a *service charge*.

 

It won't wash - so business as usual ;-)

[Guest ian cognito]

Ah, with it now, sorry, bit early in the day, and a bit late last night when I read it obviously.

[monkey_uk]

Got to admire their balls for trying this one on though! Made me chuckle anyway!

[dave]

Nah - not really. It's just a basic 'cloaking'.

 

It shows that we're having an effect though.

[monkey_uk]

Damn right!

[Guest ian cognito]

Got to admire their balls for trying this one on though!

 

Really? I'm reserving my admiration for the bank that doesn't follow suit!

[Bookworm]

Quite right, Jan!!!

 

I have to say it is a bit of a worry for parachute account, isn't it. We advise people not to close their account anyway even after they've switched, but that could prove catastrophic if all banks follow suits, as we would then have to go round closing all the dormant ones...

 

At the last count, I have 5 "live" accounts, and I think I may have an old LTSB somewhere, but I don't know if it's still open... If they all start charging, I'm going to have to rethink things fast....

[Jimbo44]

...but the point is, it's no longer a penalty for breaching the T&C's (or so they think), so therefore, they can charge what they like as it's a "service".

 

It's called 'cloaking a penalty' and I suspect that their lawyers are feeling very happy with themselves - however, it doesn't change the fact that it really is a penalty and I think any judge would see it straight away and would most likely feel insulted that they thought they could 'hoodwink' him/her that easily.

 

Business as usual ;-)

 

I agree!

 

By switching the emphasis from 'penalties' for breaching the T&C's (overlimit, returned D/D etc., etc.) they're now imposing a 'penalty' for not putting an arbitrary, set sum of money through the account each month.

 

To my simple mind it makes no difference what they call this £10 charge, it's still a 'penalty' at the end of the day.

 

I'd love to see how a judge viewed it but, unfortunately in some ways, I'm not a FD customer.

[monkey_uk]

Really? I'm reserving my admiration for the bank that doesn't follow suit!

 

Of course, that goes without saying!

 

Should we open a book?

[Dani]

I have an overdraft with them which I'll be making damn sure I pay back before February and then take great pleasure in telling them where to stick their account!! And I'm sure they'll try to talk me round with sweet talk!!!!

 

I don't even get paid that much so I'd be getting charged every month.

 

I just hope that my normal bank account doesn't start doing this - it makes me so mad!