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?