Banks to tell customers of charges in advance

MILLIONS of bank customers are to be told for the first time what charges will be levied on their accounts before they pay them - but not just yet.

The move, when it is introduced by most big banks, will allow account holders to challenge the scale of their charges.

So far, only the National Westminster Bank tells its customers what their charge will be each month. The other high-street banks say they are either about to introduce pre-notification or are considering the idea, which is already used for many business customers.

A Barclays Bank spokeswoman said: 'We are planning to introduce it for our 7 million personal customers next year. The exact wording on the accounts has not yet been determined but it will tell them the monthly fee plus interest. The charge will then be levied two weeks later.'

The delay in introducing advance notification of charges was because of the technical complexity involved, the spokeswoman added.

Barclays expects to spend pounds 9m on developing the computerised system and pounds 12m a year to operate it. Only one in five of the bank's customers will be affected; the others do not currently pay charges.

Lloyds Bank already tells business customers in advance what their charges will be. It plans to introduce the same system for private account holders later this year.

'We have redesigned our statements so that there is a blank box where the charges will appear. They will then be debited a few days later,' a spokeswoman said. About 70 per cent of the bank's 5 million personal customers pay no charges at present.

Midland Bank said it had been actively considering whether to move to pre-notification for its 4 million customers but had not yet reached a decision. The bank has already changed from a quarterly to a monthly charging system.

A spokeswoman from the Royal Bank of Scotland said: 'At the moment we don't do it because we have not had a demand from our customers. But we are researching it.'

A National Westminster Bank spokesman said its 6.5 million private customers have had pre-notification of charges since March 1993.

'Within the first two or three months of starting, many people wanted clarification of the charges that were being levied. But, generally, they were pleased that we were telling them in advance,' he added.