While Virgin Money had been considering the compulsory charge of £60 a year for its current account customers, the new retail bank has recently scrapped the plan, according to personal and business bank account experts.
Sir Richard Branson’s newest venture, launched after the purchase of the Northern Rock retail branch network, will be offering fee-free current accounts in addition to the ones with the £60 annual charge. Those customers taking up the fee-carrying accounts will most likely be offered bonuses such as discounts on gym memberships or Virgin flights.
Industry experts say that Virgin Money’s decision to offer truly free banking is a victory for those who found issue with Sir Richard’s new retail bank. No one trusts bankers at the moment, according to the Independent Banking Advisory Service’s Eddy Weatherhill, who said that in order earn back that trust, banks need to provide examples of ethical behaviour and good standards of service.
Campaigners have also breathed a sigh of relief that Virgin Money has nipped their nascent plan in the bud, as they were concerned that the bank’s competitors would follow its lead and cease offering accounts free of charge. Virgin Money would provide its customers with a choice, said Sir Richard, as he remarked that to only offer fee-charging current accounts would be ‘very unwise.’
However, Jayne-Anne Gadhia, Virgin Money’s chief executive, contradicted Sir Richard in an earlier statement when she announced the new retail banking institution had definite plans to charge customers for current accounts. Arguing that ‘free’ banking simply doesn’t exist, Ms Gadhia insisted that the £5 a month charge would be more transparent and fairer than other banks, as they regularly seek to cover their costs by hiding charges wherever they can.