State-owned bank will charge customers €10 for each unpaid order
State-owned AIB has written to thousands of customers to tell them it will no longer pay direct debits or cheques if they do not have enough money in their current accounts.
It also said it will charge customers €10 for each direct debit or cheque that goes unpaid.
The move will hit those who run short of money in the run-up to pay day.
Michael Kilcoyne, chairman of the Consumers’ Association, described the change as “nasty”.
“You are talking here about people whose finances are tight,” he said.
“They might have been on the PUP payment and are paying higher electricity prices. This is nasty.”
He accused the bank of being greedy and called on Finance Minister Paschal Donohoe to stop the fee move.
The bank has written to 100,000 customers telling them it will no longer facilitate them if they run short of funds.
It has around 2.3 million current account customers.
The change, which will be introduced in November, comes only a year after the bank started imposing charges on around 200,000 customers for the first time.
At the moment, the bank pays customers’ bills when there are insufficient funds in accounts.
It charges €5.15 and applies interest as the customers would be overdrawn.
However, it has decided that from November it is changing how it operates its current accounts service.
Customers were told in an email: “As part of your current account terms and conditions, you need to have enough money in your account to meet your payments.”
AIB said that in the past it had sometimes paid direct debits and cheques when customers did not have the money in their current account.
It said that from November 4, these payments would not be paid if there was not enough money available, and an unpaid item charge of €10 per item would apply.
“You can avoid the ‘unpaid item charge’ by ensuring you have enough money in your current account to cover all your payments when they are due,” the message to customers advised.
Asked about the move, AIB said: “If customers have insufficient funds in their current account to meet a direct debit and/or cheque, the payment may not be processed and they may incur a charge on their account.
“We have also provided some hints and tips to customers on how to manage their accounts. Customers with any questions can contact us on the dedicated phone line – 0818 300 106.”
At the end of last year, AIB removed an option for those with spare funds to avoid fees.
Up to then, customers who kept a balance of at least €2,500 in their account at all times were able to avoid quarterly maintenance fees and other charges.
That change meant average annual costs of around €72 for these customers.