Increase in current account fees by banks

08 May 2008

Banks try to boost profits before OFT bank charges cap

Millions of current account customers are facing an increase of as much as 20 per cent in monthly bank fees as banks try to boost their revenues before a potential ruling to place a cap on overdraft fees is made by the Office of Fair Trading.

It is estimated that seven million customers will be affected by the move.

The Royal Bank of Scotland and Natwest, owned by RBS, and Lloyds TSB have announced an increase in monthly fees for their customers. The increases will affect those consumers who have signed up to packaged current accounts. These accounts offer extras such as free travel insurance to justify the monthly fee.

David Black of Defaqto, the financial analyst, said: “The current account market is going through a lot of changes as a result of the OFT test case.

“If the conclusion is that these charges are too high, the OFT could seen to force banks to reduce them. If that’s the case, banks have to look for other ways of making money.”

The three banks have spoken out in defence over the move saying that higher fees are reflective of the increase in the range of benefits offered to their customers. They also highlighted that the Banking Code forbids banks from moving customers with free accounts to fee-paying accounts without their permission.

Share This News Article

• reddit
• del.ico.us
• Digg It!
• Facebook
• StumbleUpon

• Google Bookmarks
• Yahoo! My Web
• Newsvine
• livejournal
• BlinkList

‹ Back