Acceptance of bank account fees 'will take time'
10 March 2010 15:26:04
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| Consumers may be reluctant to accept monthly bank account fees. |
Commenting on the revelation that Virgin Money plans to charge a monthly payment for all of its current accounts, Martin Bamford from family-owned firm Informed Choice observed that the reception to bank account charges in the past has "not been particularly welcoming".
"It might take some time for customers to accept this model of banking," the chartered financial planner suggested.
Mr Bamford conceded that consumers are already aware that banking is not 'free', but insisted that the move towards explicit monthly fees for accounts "represents a cultural shift that many customers will find difficult to swallow".
Despite this, he predicted that the British banking system will become more like the European model, where monthly charging is commonplace.
He also claimed that the clean and transparent approach to charging would be appreciated by customers, many of whom have lost confidence in the existing system.
Jayne-Anne Gadhia, chief executive of Virgin Money, revealed the new bank's plans to charge a low monthly fee for all of its current accounts in an interview with the Sunday Times.
She defended the "transparent" move, pointing out that banks with free current accounts "have to cover the cost ... with hidden charges such as overdraft fees".
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