The decision by the Bank of Ireland to overhaul its fee structure for its current account customers has been condemned as a “slap in the face” for consumers.
As a result of the changes announced this morning, some of the bank’s customers will be hit with fees and charges for the first time.
The bank has defended the changes and insisted most of its customers will still be able to avail of free banking.
From February 21st, customers who lodge at least €3,000 into their current accounts over the course of a quarter and make nine debit payments from that account using the bank’s phone and online services over the same period will be exempt from charges.
Customers who maintain a minimum credit balance of €3,000 in their current accounts throughout the full quarter will also not be asked to pay bank fees and charges.
At present, customers qualify for free banking if they conduct just three online or telephone transactions per quarter or keep a minimum of €500 credit in their account during the fee quarter.
Customers who do not meet the new criteria – with the exception of 'Golden Years' and student account holders who are offered free banking – will be charged 28c for each transaction. Nearly three quarters of the bank's 1.2m current account holders will potentially be exposed to the new fees.
The bank said it had to bear significant costs in connection with current accounts but insisted the changes would not negatively impact on many people. It said they were "designed to offer any customer who conducts the majority of their day-to-day banking transactions with Bank of Ireland the opportunity to enjoy the benefits of the free transactions offer. The low minimum turnover will ensure most customers can qualify and is the equivalent of a €1,000 salary lodgement plus three payments by telephone or online per month."
Consumer Association of Ireland chief executive Dermott Jewell said many loyal customers of the bank would now be asked to pay charges. “It is a clear message that consumers should not expect loyalty," he said. "So if loyalty is gone, than we in the CAI believe Bank of Ireland customer should look towards switching to banks which offer better value for money.”
Fine Gael’s banking spokesman Damien English accused the bank of unfairly passing costs onto its customers. "Imposing charges of this nature in a bid to limit costs for the bank is the thin end of the wedge," he said. "Many of our banks are still only operational as a result of being bailed out by the taxpayer. It is grossly unfair that the public is now being penalised in this way."
Labour’s finance spokeswoman Joan Burton said the changes would hit those with the lowest incomes, lowest balances and fewest payments.
"At the time of the announcement of the original bank recapitalisation in December 2008, the Government told us that the banks had given a commitment to ‘broaden the provision of basic or introductory bank accounts and will promote these accounts to socio-economic groups where the holding of bank accounts is less prevalent’. Of course nothing has been heard of this commitment since, but the introduction of this range of charges by Bank of Ireland runs totally contrary to the undertaken given," she said.
