First Direct continues to lose custom
July 13, 2007
The UK’s leading Internet bank, First Direct, is continuing to lose customers hand over fist following its introduction of a £10 monthly charge to certain customers, which came into force in February of this year.
The charge is applied to the accounts of those that do not have a certain amount of money coming into their accounts each month, or those that do not have any other financial products with First Direct other than a current account.
The bank’s decision to introduce the charge was announced late last year, and caused outrage amongst some of its customers, with claims that the bank was penalizing lower income customers that did not have a certain amount of cash going into their accounts each month.
First Direct, on the other hand, stated that its decision was based on trying to encourage people that left accounts dormant to start using them or to close the account, as it was costing the bank money to maintain the accounts but in many cases they were not even being used.
The bank had around 1.2 million customers, and claimed that under 200,000 would be affected by the charges. However, in the past few months along, since the charges were introduced, the bank has lost in excess of 20,000 customers.
According to officials from First Direct only a very small minority of customers have actually had to pay the fees, and this can be remedied by taking another First Direct products, such as a loan, credit card, or savings account.
A First Direct official stated that the fee meant that all customers could receive the same standard of service, He also stated: ‘We are pleased with the customer response. Most customers have another product with us and were unaffected by the change.’
Alan Wright
13th July 2007
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