Consumers face new charges as bank’s profits plummet
- 12TH JUNE 2007
There have been numerous rumours surrounding the way consumers will be forced to go about their financial business in the future as of late. The scandals over payment protection insurance (PPI) and unfair bank charges have resulted in severe regulation that has undoubtedly affected the profits of all high street banks.
It has been suggested that banks may actually begin to charge consumers for having a current account and indeed, some have already begun to offer fee-based current accounts with enhanced features in an attempt to attract consumers. However, YouGov recently found that up to 83% of consumer affected by compulsory account fees would switch financial providers were this to happen.
The UK financial industry has actively maintained free banking, despite the fact that the majority of first world countries have charged their customers for maintaining a current account for years. However, imposing current account fees could actually put banking out of reach for some consumers and send others further into debt.
It is ironic that this prospect has actually increased the demand for payment protection insurance, with increasing numbers of people considering standalone policies. Standalone policies, like those offered by independent payment protection provider British Insurance for example, may further affect the banks’ profit margin.
As more individuals begin to explore their financial options, more are actually moving away from the banks and towards fairer providers that actually offer value for money. The income payment protection insurance offered by British Insurance is not only up to 80% cheaper, but also covers all debt instead of one specific debt. The trend is not surprising when perceived in this light.
