Direct To Your Wallet/Purse

jambutty · 15-11-2006, 18:16

First Direct bank, owned by HSBC, is the first to screw their customers more than they already do.

The proposal is that a current account holder will be charged £10 per month just for having an account unless it contains a minimum of £1,500 or the customer takes on another of their services like a savings account or insurance.

First Bank’s comment, “This is aimed mainly at those accounts that are little used or dormant.”

Other banks are keeping an eye on the outcome.

In a word GREED has come to the fore.

The banks already pay us the smallest amount of interest that they can get away with but our money in their bank earns them far more than they pay us.

OK. I accept that they have heavy overheads in providing a banking service and have to pay the ubiquitous shareholders an annual dividend but this latest, “let’s fleece Joe Public some more” has more to do with First Bank maintaining their profit margins than anything else. If I had an account with First Bank, and I haven’t, I would switch fast.

I also heard the other day that Credit Card issuers are considering making an annual charge of £35 to help off set the fraud that occurs. With the interest that they charge they could afford to pay US £35 pa for using their Credit Card.

Maybe it is all my fault because in all the years that I have had a Credit Card I have never once paid any interest. I have always settled the account in full each month. So the bank issuing the Credit Card that I have, have never made any profit from me. Not one single red cent. But they have tried to force me into paying some charges from time to time by not sending me the monthly statement. If the statement hasn’t arrived 7 days after it is due I find out what the balance is and send them a cheque to cover the amount.

SPUGGIE J · 15-11-2006, 19:48

Sounds to me like a touch of blackmail. With all the money that banks make I cannot understand why they want to go down this route. Maybe its time the head honcho's took less in a salery and leave Mr and Mrs Public alone.

Mancie · 15-11-2006, 20:16

I don't think its blackmail.. just good old fashioned explotation. I would guess that for a sizable proportion of people the only time they have over £1500 in the bank is pay day! if the rest of the money grabbing banks follow suit then its a rotten deal for most people.
Am I right in thinking pensions are paid directly into bank accounts these days?..if so then pensioners will have no choice but pay.. it boils down to racketeering, Al Copone would have been proud to have thought it up!

accymel · 15-11-2006, 20:25

Yeh saw their Boss on the news this morning & to be honest he couldn't answer much, in one breath he's charging people that haven't got 1500 in the bank per month [as if anyone but rich people do have!!] so thats most of us out & then he says when questioned about poorer people going to suffer he said oh but they wont be charge on majority of accounts that dont have 1500 in

TBH i dont think they have thought about it properly & its implications & just saw ££££ signs from their customers yet they are not suffering with profit loss talk about greed - the implications could be detrimental if banks started to do this as most benefit payments now go thro the bank account too, so in effect needing a bank but being charged to get their money & pay bills - who would lose out yet again - the poor & the hardworking people again the rich stave off scot free!!!

Margaret Pilkington · 15-11-2006, 21:19

These charges will hit the poorer patrons of the banks as they will come into force for those who don't put in £1500 per month....as always the richer customers will not pay anything. I don't know if it is true but I read somewhere that the banks make £1100 per SECOND. I believe that Jambutty is right when he says it is all down to greed.
I know that if my bank were to bring in charges for my current account (that has never been in the red)...I would move every red cent to a bank that didn't charge.
I too, have a credit card that is paid off in full every month, so they make no profit from me there.

andrewb · 15-11-2006, 21:32

Well I can see one good thing coming out of it, if people have a savings account they'll not have to pay, and they'll be able to save money better!
Unless of course your income=outgoing then you're pretty screwd with this new system as there isnt an excess to start saving..

entwisi · 15-11-2006, 21:33

Let me clarify a few things,

1) Its not that you have to keep 1500 quid in your account, you have to have 1500 quid go through your account. i.e. if you pay in that amount from 2 salaries then its free no matter how much is in the account(minimum wage is ~10K/year or 800 quid a month so 2 min wage salaries will be enough)

2) if you have another product ,savings account, CC(even if like JB you pay it off each month), agreed overdraft, etc then its free.

3) Banks are a business! They exist to make money be that for shareholders or a CEO is absolutely irrelevant. If they don't then they are out of business and you would soon be screaming where your savings had gone. There is a risk to almost all their investments and they have to cover all risks due to LEGAL requirements that are set by the goverment. You may not understand it but its not normal people where banks make all these millions of profit. the general public actually COST money to service their accounts, I haven't heard anyone thanking them for this service over the last 20-30 years!

4) and this is the biggy!!! the UK is nearly UNIQUE in having a free banking service. Abroad you pay for writing cheques/making ATM withdrawals, Standing orders etc. If you lived abroad you would be used to paying for your banking service and this would not be newsworthy at all.

So before you start shouting teh odds, please make sure you understand what you would be looking at if you lived abroad.

Margaret Pilkington · 15-11-2006, 21:40

I have travelled extensively in Australia and I have a bank account there.....and yes you do get charged for having the privilege of having your money kept in a relatively safe place........and while I agree that banks ARE a business..they all seem to be making an awful lot of money. I would still move my account to a bank that didn't charge if my bank were to bring in charges.

WillowTheWhisp · 15-11-2006, 22:42

Never mind what they do abroad. We're not abroad, we're in England. In some parts of 'abroad' the pensioners get a darned sight more pension than they do here. As several have already said it's the poorer people who will end up worse off. Yes, OK no problem for a 2 wage earner family with their wages paid directly through the bank but what about a lone pensioner who has to have their pension paid via a bank account? They are the ones who are going to find paying bank charges a struggle.

In the olden days when I worked in a bank we charged for every transaction on a cheque account. I think it was 10p per transaction but we were also paying 15% interest on savings! Perhaps that puts things into perspective a bit.

shillelagh · 15-11-2006, 22:56

I had a bad enough time opening an account because of not working. Now if they start charging if you dont put £1500 in your account in a month then i'm out of luck - it would take 3 months to put that through my account. I'd have to pay unless i could find another bank to take me on. Its not just me though what about pensioners, unemployed, sick what do they do. By the way what does a housewife do - she maybe has an account since before she got married and its lying there maybe £100 in it for emergencies?

cashman · 15-11-2006, 23:04

as usual it SUCKS, and the better off cannot see it,cos it don,t affect them.

Bazf · 16-11-2006, 00:52

Try this The Consumer Action Group

Ten steps to reclaim bank fees | This is Money

“The test still remains whether the charges are a true reflection of the bank’s actual costs” said The Bank Action Group spokesman. “If the charges make profits then they are unlawful.

entwisi · 16-11-2006, 07:45

The Goverement have forced all banks to provide a 'basic bank account' which must be such that it can't go overdrawn. I believe that these must also be free so there should always be an account suitable for those on low incomes/pensioners etc (If you already have an agreed overdraft then I believe the other accounts are also free under First Directs plans).

Just because something has been in a particular way for some time why should PRIVATE companies be forced to keep them that way? As I said before, Banks exist to make a profit just as the corner cafe or the bloke on the market. You don't begrudge them a living so why should larger companies be tied to certain level of profit? If you look at Profit/Turnover you will find that banks actually make a small % profit against small businesses.

You can vote with your feet now if you don't agree with this, First Direct is part of HSBC aka Midland. Move all your accounts/loans/CCs/ etc to one of the other banks and make it known that you are leaving HSBC because of their decision to charge. The news does filter up in the companies to the higher levels and CEOs aren't daft enough to ignore peoples feelings, if they see a significant number of people joining their bank because its free to use then they are likely to keep it that way to attract more customers.

Mancie · 16-11-2006, 08:01

Quote:

Originally Posted by entwisi

The Goverement have forced all banks to provide a 'basic bank account' which must be such that it can't go overdrawn. I believe that these must also be free so there should always be an account suitable for those on low incomes/pensioners etc (If you already have an agreed overdraft then I believe the other accounts are also free under First Directs plans).

But you can't pay bills or use direct debit with the basic account, its reaching a point were the only way to lead a normal life financially is to have more than a basic savings account, I mean peolpe are literally forced to use banking sevices and the banks know it!.. its extortion of people reicieving tax credits or a state pension. And what about family allowance? I don't think its more than 20 quid a week for one child..so you have to pay £10 for the privilage of having it paid into your account?
Cashman is right.. its only the better off getting away scot free again who don't see anything wrong.

WillowTheWhisp · 16-11-2006, 08:21

Like many people I pay my bills by monthly direct debit. It makes life simpler and in some cases cheaper. Those people who can't get a bank account which pays DDs (ie only a basic savings account) end up paying more for some of their bills. Again the poorer people who can least afford it end up worse off.