One embattled building society has announced an overhaul to its current account that could lead to as much as £60 annually in new charges for its customers.
Norwich & Peterborough has split its current account customers into two separate groups. Customers who fail to make a minimum balance deposit of £500 every month become what the building society is referring to as Gold Light account holders. These account holders will be subject to a £5 fee if they make less than five monthly transactions.
Customers who exceed the £500 monthly minimum are to be grouped together in the new Gold Classic account. They too are subject to a £5 fee if they fail to pay less than £500 into their current account monthly.
Several of the building society’s account holders have protested the move angrily. Banking customers suggest that N&P was prompted by its financial difficulties to institute new fees.
The building society has defended the new policies. N&P stated that other benefits for its customers have been introduced, such as ATM withdrawals or purchases made overseas with a debit card with no fees attached. Additionally Gold Classic customers also receive free key and credit card insurance, a £40 value.
These new charges come at a time when the concept of free banking has has been scrutinised closely by the Treasury Select Committee. The committee is investigating the amount of choice and competition inherent in the banking industry.
One area of significant concern is how customers end up paying for banking. Towards that end MPs grilled Lloyds TSB retail director Helen Weir in December. Ms Weir faced accusations of over-charging customers for everyday banking transactions. Additionally the concealment of those costs were also laid bare.
Ms Weir in the end admitted to what have been come to be referred to as stealth charges. These so-called stealth charges can add approximately £150 annually to the cost of keeping the account.