/ Money

A trip back in time: bank charges have never been simple

I’ve been hunting through the Which? magazine archives to see how long banks have been charging confusing and unfair fees. My search spanned nearly 50 years of magazines and uncovered some eye-opening findings…

We’re calling for Big Change to banking culture, with mis-selling punished and bankers being made to comply with a code of conduct. For evidence of just how ingrained the anti-consumer culture is in banking, here’s a snapshot of what I found in our archives.

In 1967, we wrote that ‘there is no simple way of finding out what a current account at any of the big five banks will cost.’ A Which? member said that ‘there is too much mystique about banking and bank charges.’ Plus ça change, eh?

A cacophony of confusing bank charges

So it’s 1975 and you’d probably need a maths degree to understand the menu of charges imposed by some banks. For example, we found Bank of Scotland charging 5p for each standing order and 6p for each debit on your account (including standing orders) in any month when your account balance was less than £50.

Whereas if your salary was paid directly into your account, then the first 30 debit entries would, depending on your account balance, be either free, 75p or £1.50. It was then 8p for each additional debit entry (less two and a quarter per cent of the amount by which the average account balance exceeded £100). Confused yet?

Even when banks did charge explicitly for accounts, it didn’t stop them trying to cross-sell other products. For example, there was a storm of protest when Barclays and Access sent out millions of unsolicited credit cards in the late 1960s and early 1970s.

We welcomed the Consumer Credit Act in 1974, which banned the unsolicited issue of credit cards. In 1984, some banks still had complicated charging structures, applying different charges for cheque, standing order, direct debit and ATM withdrawals. Some also charged different amounts for automated credits (salary payments) and non-automated credits (other paying in methods).

Banking has never been ‘free’

The ways banks charge for current accounts is more subtle nowadays, but even if we don’t pay a per-transaction fee, that doesn’t mean banking is free. The lack of credit interest, high overdraft fees, costly overdraft interest rates and the charges imposed for using your card abroad are all ways the banks charge us for their supposedly ‘free’ services.

This is all the more reason why we need a complete overhaul of the banking sector, with a strong regulator willing and able to stamp out and punish poor practice. What is the highest or least justifiable bank charge you’ve been subject to over the years?


Why should banking be free – they look after your money securely, pay your transactions, deal with your cheques and supply you with regular statements. Perhaps they should pay interest on your money, and then charge for a cheque book, and for processing each transaction. You could then compare banks. Those who have more transactions and smaller balances would not then be subsidised by those with few transactions and larger deposits. You could also judge how much surplus (if any) to keep in a separate deposit account. We should not assume people to be incapable of working out what their costs would be, providing they are transparent. On-line calculators would no doubt be made available, just as for energy bills.

Hi Malcolm, I don’t think Martyn is suggesting that banking should be free. We just think that banks ought to be much clearer about their charges, and that they should be more representative of the cost to the bank itself.

I would welcome a shake-up of bank charges. It’s ridiculous that incoming electronic payments from other EU countries are typically charged at £6 or £7, whereas paper-based transactions such as cheques (requiring an element of costly manpower) remain free of charge. Bank charges should be more closely related to cost.

Let us not penalise charities, which often have no practical alternative to using cheques.

Charities can send and receive bank transfers, which do not require costly manpower for the banks. Anyone who chooses to use a paper-based method of payment should pay for the unnecessary privilege, given that alternatives have existed for years.

Anyone involved with small charities will know why cheques are so important. For example, if I am given a cheque at a village fete it is difficult to see a practical alternative. Handling a lot of money is asking for problems, both for the donor and the charity.

Please recognise that charities are doing an important job – and demonstrate a little charity towards them.

NFH – I have just seen this page again after dealing with donations for the small charity I work for. Last week I received £73 in cash and 8 cheques totalling £108. This was collected at an event held in the country. Tomorrow our society is holding its Spring Fete, again away from any building.

I don’t want to mess about with cheques, or cash for that matter, but I need a practical alternative.

Earlier this week I had a couple of banners made by a chap who runs a one-man business in the next village and does a very good job. I would be more than happy to do an electronic transfer but he prefers cheques. 🙁

Banking is usually “free” of individual charges if you have a current account – The interest made on the account “paying” the charges – I like that system. With Midland Bank they charged for everything but would not itemise the charges. So I became fed up of noting “charges” but every time I queried them they refunded the charge, So I left for First Direct – If First Direct start to charge I will leave,

Cheques are very useful – we receive them all the time – particularly from OAPs. We are customers of the bank – the customer is always right -(at least it used to be so until the Con Dems)

As hs been said above, most banks provide a service – taking money in, paying direct debits, dealing with cheques and sorting out the usual, paraphernalia associated with personal finance. Provided the account is in credit this is “free”. How many of us would appreciate having to do all this without our bank? Money under the mattress, salary slips everywhere….. you know what I mean. Most paying accounts give “free” perks to the subscriber. I’ve yet to find one with any perks that I’d use and certainly not any that add up to the value of the monthly fee. In the larger picture, banks have proved themselves incompetent, devious and unregulated, but, domestically, my bank has delivered the goods for the last few decades without a hitch. Suits me. That’s the current account, of course, saving accounts are an entirely different story. I haven’t much good to say about any of them on that score.

Ms B says:
25 May 2013

Banking should be free and it is a disgrace of banking bullies to suggest people cannot challenge the banks and their charges. Banks like the Royal Bank of Scotland should start to serve the public completely given their continued existence is as a result of social welfare for banking failures. Banks do not simply look after your money, they actually use your money to make money so they should pay people to quite frankly bank with them. Banking failures have cost taxpayers a staggering £850bn. The decision to help these merchants should be left with the supporters of banks, people like the politicians, perhaps Malcolm could devote his life to this. So please lets start talking about the austerity measures and what banks owe people rather than the other way round.

Disgusted Customer says:
5 August 2014

I have been a customer of Halifax for many years and recently transferred quite a large amount of money to pay a bill. I was charged £25 for the transaction which took only minutes by pressing a few buttons. I had expected to pay around £10 but was greatly shocked by the amount . Surely this fee was very unfair.

Disgusted Customer