HSBC has denied it’s planning to end free banking – but has indicated more customers may end up paying a fee for their accounts.
London’s Evening Standard has reported that the banking giant had said it was ‘inevitable’ that it would soon charge for current accounts.
The paper said that charging for current accounts is being seen as a response to changes ordered by the Office of Fair Trading (OFT).
The OFT recently told the major banks to slash the amount they charge people who fail to pay their credit card bills on time from £20-25 a time to £12.
The Evening Standard reported HSBC Chief Executive Dyfrig John saying: ‘The credit card charges have crystallised the situation. We moved quickly to meet the regulator’s regulation but it is clear that we have to look at our relationship with our customers fundamentally. They want more transparency and that means inevitably moving towards a fee-based product. That would most likely mean a monthly charge.’
But Mr John said later that the bank would always offer at least one free bank account. He said: ‘HSBC has no plans to end free banking and will always offer a free bank account. Indeed, today we already offer a combination of free and paid-for banking and we don’t expect that to change.’
Which? Personal Finance Campaigner Doug Taylor said: ‘The timing of HSBC’s decision to announce the likely end of ‘free banking’ on a day when record profits have been announced seems strange. To date there has been no OFT decision on bank charges and their fairness – only a decision on credit cards charges. This kite flying appears to be more about burying news.
‘We have said for some time that we want the banks to open their books and show us how their charges work. We reiterate that demand. Consumers won’t sign a blank cheque on future bank charges without understanding them.
‘Most other sectors would look at ways of attracting new customers and improving their services rather than simply looking at ways of creating new revenue streams. Any change in pricing needs to be fully understood and consumers will not take kindly to new charges that are not properly explained.’