Bank/customer relations hit an all-time low this year when interest-rate loadings and other irregular practices that were being inflicted on unwary account holders were revealed to have taken place in some banks.
Most banks have kept their corporate heads down (all the while insisting that they would never condone such practices). While there may indeed be improvements in the way charges are applied and disclosed, one bank so far the TSB has decided to redesign its current account to simplify charges and make them more transparent.
(It is understood that Bank of Ireland's new account is with the Office of the Director of Consumer Affairs, Mr William Fagan, being checked out and will also be launched shortly, subject to any changes recommended.)
The new TSB Current Account Plus provides all the usual services - ATM, Laser and cheque cards, credit-card facility, overdraft - but it is also the only bank to give customers advance notice of not just the previous quarter's charges, but also any interest charges (from overdrafts, loans, etc) that may have accrued during the period.
All transaction charges - for cheques, ATM withdrawals and deposits, direct debit and standing order transactions, etc are now a flat 20p (as opposed to between 15p and 23p). Like most banks, TSB has operated a free banking facility for customers. But it has adjusted this slightly and has set up three categories of charges. Now if there is less than £100 in an account (the lowest minimum required by any of the banks for free banking) £10 quarterly account charge is incurred and a £1 monthly statement charge, but there are 25 free transactions, and no charge for cheque cards and replacement cards if lost. If there is an average of between £100 and £299.99 in an account during any quarter, 50 transactions are free. If there is more than £300 in an account any quarter, the customer enjoys unlimited free transactions and doesn't pay any quarterly account or statement charges. It is important that the facility is based on an "averaged" minimum amount, says the TSB, since other banks penalise customers whose accounts fall below the minimum amount for even one day during the quarter.
In addition, TSB is going to reward loyal customers by letting them reduce the £10 quarterly charge by 25 per cent a time if they qualify for one or all four of the following: their salary is lodged directly to the account; they have a mortgage worth more than £40,000 with the bank; they have a loan with the bank worth at least £4,000 or have savings of £5,000 or more with the bank. You don't have to pay the quarterly charge at all if you have more than £80,000 worth of separate or combined borrowings or savings/investments in the bank. Existing TSB customers will be encouraged to switch to the new Current Account Plus, but they can continue to operate their old account if they prefer. The £10 quarterly account charge is higher than the average quarterly bank charge (which is usually under £5), but this cost should be cut down by not having to pay for some ancillary charges and the loyalty discounts.
The TSB says it started working on this simpler, more transparent account 12 months ago, but hurried the process on after the National Irish Bank controversy in order to try and show that something could be done to keep customers more aware of the costs associated with a current account. It is understood that the Bank of Ireland is also about to bring out a more transparent account, in which the customer can choose to pay a flat fee for quarterly transactions and services or operate a "pay-as-you-go" type account.
