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Saturday 23 August 2014

New AIB fees breach banking rules, says watchdog

Charlie Weston Personal Finance Editor

Published 23/03/2012 | 05:00

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MOVES by AIB to charge its customers if they fail to keep a chunk of money in their current accounts are in breach of Central Bank rules, the head of the National Consumer Agency said.

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Ann Fitzgerald claimed yesterday the nationalised bank was breaking the rule that required it to act in the best interests of its customers.

AIB has been caught in a storm of criticism after it said it would charge customers a quarterly fee and impose a range of charges if they did not keep a credit balance of €2,500 in their current account from May 28.

Most of the almost one million customers hit by the changes would not be able to afford to keep so much money in their current accounts and would end up being hit by the fees, finance experts said.

The move comes despite taxpayers pumping €20bn into the bank to rescue it.

Customers who do not keep a credit balance of at least €2,500 in their current account will be hit with a quarterly charge of €4.50 and charges per transaction of between 20c and 30c.

Withdrawing cash in a branch will cost 30c for those who do not maintain the balance.

Responsibility

Banking sources said this was likely to mean the average householder would end up shelling out €90 in current account fees.

Ms Fitzgerald said the decision by AIB to charge customers fees if they did not meet the tough new criteria was an "insult".

She said the bank was in breach of the Central Bank's consumer protection code and she was writing to regulators to point this out.

The code imposed a responsibility on AIB to act in the best interests of its customers, Ms Fitzgerald insisted.

The NCA boss advised bank customers to check out current accounts offered by rival banks.

And she has called on AIB to reverse the changes that could see up to one million customers paying out fees.

A spokesman for the Central Bank would not comment on whether or not AIB was in breach of the consumer code by allegedly failing to act in the interests of customers.

A spokesman for AIB said it was its view "that our obligations have been met under relevant codes".

The change follows similar moves at Bank of Ireland, EBS and National Irish Bank.

And Permanent TSB has abolished fee-free banking for new customers.

Irish Independent

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