Barclays hits 250000 firms with shock fees...

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Barclays hits 250000 firms with shock fees...

Postby dutchman » Sun Jan 19, 2014 2:20 am

Hundreds of thousands of Barclays business customers are to be hit with unexpected charges when the bank forces them to change accounts.

The likely outcry will be a major blow to the efforts of Barclays chief executive Antony Jenkins to repair its battered reputation after it was hit by a series of scandals including allegations of aggressive tax avoidance, excessive pay for top executives and the Libor fixing scandal, which eventually cost previous chief executive Bob Diamond his job.

It comes amid a fresh row over banking following revelations in last week’s Mail on Sunday that Royal Bank of Scotland plans to ask for approval to pay its bankers twice their salaries in bonuses.

Regulators announced an investigation on Friday into RBS’s treatment of business customers and there were threats from Labour leader Ed Miliband to force a break-up of the biggest lenders.

Barclays told this newspaper that it planned to move 800,000 firms to its flagship small business current account, launched in May last year. The switch will mean that about 250,000 firms that pay no fees for in-credit banking will be hit with charges for each transaction.

This could amount to hundreds of pounds a month for some users. Among those already paying fees for their account, most will pay the same or less, Barclays said.

The bank is bracing itself for a backlash. To gauge the response, Barclays will send letters to 20,000 firms next week telling them their account will be switched. The rest of the letters will be sent out ‘later in February’.

Sue Hayes, head of business banking at Barclays, defended the move, saying it would offer greater clarity over charges and a simpler structure.

She said: ‘More than 60 per cent of businesses being moved will pay the same or less in banking charges. About a third will pay more to various degrees because they are on older accounts which were historically free. We believe this change will make it fairer for all of our business customers.’

Hayes added that the 3 per cent of firms facing a rise in charges of more than 20 per cent or £25 a month would have the increases introduced over ‘a couple of years’ to prevent financial problems.

Firms on the new account will be rewarded for loyalty by a refund of a percentage of the fees based on how much is paid through the account and how long they have been a customer.

Meanwhile, Labour’s plan to break up the big banks faces rising problems this weekend. Miliband said on Friday he wanted the Competition and Markets Authority to rule on how the banks should be split up.

Lawyers said, however, that the authorities would first have to say if the market was uncompetitive.Peter Willis, a competition lawyer at City solicitors Bird & Bird, said: ‘The competition authorities are supposed to be independent from Government. They are not supposed to take instruction.

‘If the Government directed the CMA to do this you would get judicial appeals. It would be putting the cart before the horse in asking the CMA to decide how to solve the problem before it had decided there is a problem.’

Labour’s plan came after a tough week for banks, RBS in particular.The Financial Conduct Authority said it would investigate claims that the 81 per cent taxpayer-owned bank mistreated business customers in financial difficulties. And following this paper’s report last week that RBS is to seek bonuses of double the salary of some of its bankers, the Treasury came under pressure from Labour.

Under new European Union rules, the bank would need approval by its shareholders, meaning the final decision would lie with George Osborne.

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Re: Barclays hits 250000 firms with shock fees...

Postby rebbonk » Sun Jan 19, 2014 6:07 am

Barclays aren't the only bank in town!
Of course it'll fit; you just need a bigger hammer.
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Re: Barclays hits 250000 firms with shock fees...

Postby dutchman » Sun Jan 19, 2014 3:21 pm

The others wil folow suit though and most analysts believe free personal banking (for those in credit) will soon come to an end as well.
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Re: Barclays hits 250000 firms with shock fees...

Postby rebbonk » Sun Jan 19, 2014 6:17 pm

dutchman wrote:The others wil folow suit though and most analysts believe free personal banking (for those in credit) will soon come to an end as well.


Then I think it reasonable that workers demand to be paid in cash. It's wrong to charge you to get your own money after forcing you to use their facilities.

Re-instate the truck acts :twisted:

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