Outlook: Halifax shoots itself in the foot again on charges

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IT IS a curious thing about bankers, but for a generally fastidious and trustworthy lot they do have a terrible habit of putting their foot in it. Just as Don Cruickshank, the former telecoms regulator charged by the Government with investigating whether the major banks are failing the wider economy, was beginning to wonder whether there was any point in his inquiry, the industry has come riding to his rescue with a series of initiatives so guaranteed to inflame the public mind that Mr Cruickshank must begin to believe there must be a god afterall.

The latest howler comes from Halifax. Britain's biggest mortgage lender is already under attack for charging a disloyalty fee to its customers for using the cash points of other banks, thus driving a coach and horses through the concept of a unified ATM network. Now it has written to customers warning of a pounds 10 a pop charge for drawing up cheques to third parties.

The timing and manner of this latest piece of cack handidness could hardly be more cute. The Government is tomorrow planning to announce a series of policy initiatives for tackling the problem of social exclusion in banking and financial services. Ministers have been persuaded to back away from earlier plans to make it a legal obligation on banks to provide accounts to all in return for voluntary undertakings.

It just so happens that the account on which Halifax plans to start levying its charge, the so-called "Cardcash" account, is one of the models for this new universal account for poor and high-credit-risk people. Halifax's justification is that there has been a big surge in demand for cheques written out to third parties, and it is compensating by allowing greater cash withdrawals.

All the same, the "socially excluded" must begin to wonder what the point of having a credit account is if they are to be charged for its use. Certainly this is not what ministers have in mind when they talk about a low cost account available to all.

In fairness, it seems only right to put the banking side of the case. The word "free" is now so much a part of the marketing man's vocabulary that it is tempting to believe it might actually be possible to get something for nothing. Unfortunately, it is not. For every so called "free" service or product someone always pays. This is as true of banking as any other industry, and it as true of cash points as it is of the new style "people" accounts. Every money transfer carries a cost, and if the person making the transaction doesn't pay, the bank's other customers will.

Even so, this seems a bizarrely stupid thing to have done so close to the Government's social exclusion initiative, and with Mr Cruickshank floundering around for a big stick with which to beat his prey. In any case, few people are going to believe pounds 10 to be a fair price for making out a cheque. Does the left hand know what the right hand is doing in these organisations?