First Direct account introduces account charges

First%20DirectFirst Direct, the internet and telephone bank, is introducing account charges in a bid to reduce the number of dormant accounts. The bank says the accounts represent a "significant" cost to its operation.

It is writing to customers to inform them that from February next year, customers who hold only a First Direct current account will incur changes of £10 a month if they do not pay in at least £1,500 a month.

The HSBC-owned company says it services more than 40,000 dormant accounts and more than 250,000 accounts which see less than ten transactions a month.

The bank hopes the policy change will encourage account holders to use First Direct as their primary bank.

Chief executive Chris Pilling says: "I want to focus our efforts on our most important customers: those who use us as their main bank, or who have a number of products with us."

He also hopes the move will encourage customers who do not meet the new criteria to take out new products or shift their salary payments to First Direct.

The move reflects research published by PricewaterhouseCoopers this week which indicates banks will begin reintroducing yearly fees for credit card products to recoup money lost as a result of changes to consumer-protection rules.

Last year, Morgan Stanley marketing director Patrick Muir predicted a return to fee-paying products as financial services companies looked to building trust and loyalty rather than chasing "rate tarts" (MW December 1, 2005).

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here