2007 will be the year of the bank charge

Price comparison website moneysupermarket has stated that 2007 is set to be the year of the bank charges, with experts stating that loss of revenue in other areas could see bank enforcing a range of new bank charges that could affect customers. First Direct, the Internet arm of HSBC, has already provoked controversy recently after announcing last year that a new account fee is to be brought in for certain customers this February, and a ten pound fee will be charged to those that don’t have a certain amount of cash in their account each month, or do not hold other products from First Direct, such as a credit card, loan, or savings account.

One official from moneysupermarket stated: "2007 will be the year of the bank charges. The investigation into current accounts is going to force banks to offer lower charges on unauthorized overdrafts. As a consequence other charges will be introduced to help the banks compensate for lost revenue. People should look out for these charges or face some unexpected bills."

Another prediction made by the comparison website is that interest rates on loans will continue to rise. This comes after three recent interest rate hikes from the Bank of England, which took the base rate from four and a half percent last year to five and a quarter percent. The moneysupermarket official said: "In the loans industry I expect the interest rates on unsecured lending to rise. Also due to the regulatory investigation providers will have to tighten up the process of selling payment protection on loans and single premium ASU products will be made illegal"

In recent controversy both the FSA and the Office of Fair Trading, along with a number of MPs, have expressed concerns over the hard sell of PPI products to consumers, stating that often the products are unsuitable and that consumers have been treated unfairly.

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