More people continue to leave First Direct
March 18, 2008
Recent figures have shown that many customers have left – and are continuing to leave – the UK’s best known Internet bank, First Direct. A subsidiary of HSBC, First Direct has claimed to be the UK’s most recommended Internet bank, and although it was very popular recent changes have led in many customers losing faith in the bank and heading elsewhere. Many people have decided to leave because of a £10 charge that the bank now applies to certain customers.
First Direct announced last year that the charge system would be put in place, and this came into force in February of this year. Certain customers – namely those that do not have a certain level of income going into their accounts each month – will have to pay £10 for the privilege of holding a First Direct current account. According to banking officials, however, this is a way of rooting out customers with dormant or hardly used accounts, as these cost the bank money to administer, such as sending out statements, but are hardly ever or never used by the customers.
In recent months First Direct has lost 20,000 customers, who have taken their business elsewhere. The bank has tried to justify the charge, stating that only around 20,000 of its 1.2 million customer base would be affected by the charges. The bank has also stated that customers can avoid the charges simply by taking on another First Direct product in addition to their current account, such as a credit card, loan, or even a savings account.
Despite losing customers the bank remains optimistic about the effects of the charges, stating: ‘We are pleased with the customer response. Most customers have another product with us and were unaffected by the change.’
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