THE NEW charges introduced by Bank of Ireland for its current account customers will come as something of a shock. The bank’s customers, in common with many others, are already feeling the squeeze brought about by increased taxes and charges. Now, in a time of particular financial stress, they are being told that the bank’s “free transaction offer on personal current accounts” will not be so free anymore.
The announcement by the Bank of Ireland was low-key. As the Christmas fervour had begun for many and the country was trying to come to grips with the worst snowfalls in a generation, it was perhaps a propitious time to push out some bad news on the quiet. However, the bank’s customers, when they are properly informed in the new year, may take exception to changes which could prove expensive for them. All bank customers are much more willing and able to change allegiance than was the case in the past. The increases run the risk of encouraging a drift of customers away to rival banks.
It is currently the case with the bank that anyone who is in credit to the tune of at least €500 is not liable to charges. In future, customers will have to maintain a credit balance of not less than €3,000 in order to escape charges; a six-fold increase. Otherwise, customers will have to put through a lot more debits to their account in order to avoid charges – using Banking 365, phone or online. Direct debits, standing orders and cheque payments will not count. There will continue to be free banking available for student and “golden years” account holders but the bank estimates that perhaps 900,000 of its 1.2 million current account holders will be exposed to the new charges which will run at 28 cent per transaction.
The Consumers’ Association of Ireland has criticised the charges. It says that customers cannot expect any thanks for staying loyal in the bank’s time of need and advocates that they should now shop around. The bank points out, quite reasonably, that it has to bear significant costs in running its current accounts. That however is not new while the charges are.
It is understandable – and commendable – that the bank should be trying to increase its revenue base. It would be preferable however if it displayed ingenuity and innovation in developing new products for which charges could be made or reached out to those who do not bank with it. Instead, the bank has plumped for the soft option of hitting its “free” customers.