First Direct fees that clients didn't count on

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The Independent Online
FIRST DIRECT, the branchless banking arm of Midland, is to raise arrangement fees for overdrafts by 25 per cent.

For a facility over pounds 250, the arrangement fees will continue to be charged at 1 per cent of the agreed limit, and renewal fees at 0.5 per cent. But the minimum fee will rise from pounds 15 to pounds 20 a year.

The new charges come into effect from 11 January. Overdrafts up to and including pounds 250 are free of any arrangement or renewal fees.

First Direct has always made great play of its helpful service and understandable and fair charging system.

I have had an account at First Direct for years, with little cause for complaint. But recently I went overdrawn on my account; a cheque was debited quicker than I had anticipated.

Then the bank statement arrived. I had been charged pounds 21.58 interest. In view of the initial aggravation, I wanted a breakdown: how many days was I being charged for and what was the rate of interest?

If I wanted the breakdown it would cost pounds 5. If the bank had got the figure wrong I would not have to pay. If it was right . . . pounds 5 extra on my account.

Customers are in a Catch 22 situation. The bank could charge whatever it liked on my account, and I had to pay pounds 5 to check it.

I asked for a copy of the First Direct tariff. There was no mention that customers would be charged for seeking information. I rang the other big banks to ask if they charged to query a figure on a statement. 'Of course not' was the incredulous and unanimous reply. Even Midland was surprised.

A First Direct spokesman said the pounds 5 charge was covered by the words in the tariff: 'We do make specific charges in respect of overdrafts and unusual items.'

The spokesman added: 'In terms of us being honest and open, I would not disagree that it is less than clear.

'But you are told about the charge when you ring to query, and it is the customer's decision whether to pay. Where it is our fault, you get it back. That is the situation - maybe we need to clarify it.'

Meanwhile, my husband was minded to query a figure of 3p interest on the statement. The First Direct operator advised against it as 'it costs pounds 10' for a breakdown.

First Direct has now written with my breakdown and is satisfied that the charges made on the account were valid.

The spokesman added: 'However, I am not satisfied with the way you and your husband have been treated when querying the charges. As some indication of our regret, I will ensure the pounds 21.58 is re-credited to your account.'

I would like to think that all customers would be treated in the same way.

There was even an explanation for the pounds 10 charge mentioned to my husband, though this was less than satisfactory.

Apparently, if you query a charge and you want a verbal breakdown the cost is pounds 5. If you want it in writing, it is pounds 10.

If First Direct really wants to be direct, it should put its printed tariff in order.