Customers continue to leave Internet bank
July 24, 2007
One of the UK’s leading Internet banks continues to lose custom hand over fist after it started applying monthly charges to the accounts of thousands of its customers.
First Direct, the online subsidiary of HSBC, has on excess of one million customers, and according to officials from the Internet bank only around 200,000 of these customers were likely to be affected by the new charges that were brought in several months ago. The bank did not foresee any issues with enforcing the charge, but many customers have decided to go elsewhere with their finances.
In the past few months the Internet bank has seen around 20,000 customers leave and take their banking business elsewhere. The £10 monthly charge was introduced by First Direct in February of this year following announcements about the charge late last year.
The charge is applied to certain accounts where a certain level of income is not seen, which has made many people angry because it appears that the bank is penalizing lower income customers.
However, according to officials from the bank these charges are meant to root out those with inactive accounts or those with accounts that are not used regularly, and the reason for the charge is that the bank has to pay for administration of the account such as bank statements even thought the customer rarely or never uses the account. One way for customers to avoid the charge is to take on another product with the bank, such as a credit card, loan, or savings account.
Despite the loss of customer one official from the bank stated: ‘We are pleased with the customer response. Most customers have another product with us and were unaffected by the change.’
Alan Wright
24th July 2007
Related Articles
- More people continue to leave First Direct Recent figures have shown that many customers have left – and are continuing to leave – the UK's best known Internet bank, First Direct. A
- Older generation enjoying online banking facilities A recent report has shown how the popularity of Internet banking has soared amongst those aged 55 and over in the UK. The popularity of Internet
- Internet proves useful for credit card customers A recent report has highlighted how many credit card users and applicants in the UK have started to rely on the Internet in order to
- APACS to start from scratch on same day payments system The payment clearance agency APACS has announced recently that it will have to start from scratch with regards to its same day payment clearance system,
- Student loan interest rates to rise It has been a bad week for students in terms of finances this week. Earlier in the week HSBC announced that it would be scrapping
Comments
Got something to say?