One personal and business bank account provider has recently decided to clobber its poorest customers by increasing its daily missed payment fines on basic accounts by a factor of three.
Banking giant Barclays has decided that from March of 2012, approximately 1 million of its basic account customers could see as much as three separate £8 charges in a 24 hour period if they try to make payments with insufficient funds in their accounts. The banking provider had in the past only subject its customers to a single £8 penalty on its simplest offering, its Cash Card basic account.
The new decision makes it even harder for those with dodgy credit histories or low incomes to which the classes of customers the basic bank account are marketed. Barclays remarked that the new triple fee was a necessity in order to make back some of the money they were losing on basic accounts, as these simple accounts do not offer overdrafts – a key way for banking providers to reap profit from so-called ‘free’ account offerings.
Now, if a Barclays basic account customer sees their balance drop and then happens to have a standing order fail, the bank will hammer them with a £8 penalty – and the bank will continue to levy the fee up to two more times every day. Consumer Focus, a campaign group and consumer watchdog, remarked that the new changes were a step backwards, warning that vulnerable low income earners could end up being left out in the cold by the new rules and lead to an increase in the amount of financial exclusion, according to spokesman Oliver Morgans.