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Original poster

My bank is sacking me!!

85 replies

TiffanyToothache · 16/06/2011 20:44

I don't know why?!

Received a notice today - in 2 months they will close my account.

It says "having reviewed matters carefully, the bank no longer wishes to provide you with banking facilities" No further explanation! I'm stunned.

I've had one account for 13 years since I was a student. I had a student loan, graduate loan and student overdraft - all diligently paid off, years ago. Good income. It's now mine and DH's main joint account - both salaries go in - DDs and SOs go out to pay bills. Recently opened a savings account with them - that's also to be closed!

It has been in credit for YEARS (since student days were over) - I pay £7 per month for my account. No debt with them.

Been on mat leave this year so salary dropped - would this be why?

OP posts:
LorettaMasonPotts · 16/06/2011 21:10

Like SingleFosterMum, I'm interested to know why you pay the bank £7 a month? My bank (Halifax) gives me £5 every month that I'm in credit.

AnyFuleKno · 16/06/2011 21:11

banks need credit and deposits, yes.

However servicing bank customers costs a lot of money. Accounts running in credit don't bring in as much money as loans and overdrafts.

One of the reasons banks give you a current account is so that they can cross sell you all of their other products which have a higher profit margin. If you're not a candidate for this then they may decided it's not cost effective to keep you.

MrMan · 16/06/2011 21:12

Actually tortilla your statement is also only partially true. Retail banks like RBS have two main sources of funding for lending; retail funding (deposits as you mention) and wholesale funding (money borrowed from the market and then re-lent at higher rates). Until recently wholesale funding was significantly larger than retail, which was a part cause of some of the financial rollercoasting we have all been enjoying recently. Increasing the retail funding percentage of retail bank assets has been a major topic for proposed bank reforms.

starmucks · 16/06/2011 21:15

Servicing accounts is actually cheap, running branch networks is expensive.

malinois · 16/06/2011 21:15

tortilla erm, this hasn't been the case for a long time. Banks don't actually need money to lend money. In fact banks lend far more money than they have on deposit, by the magic of fractional reserve banking, inter-bank loans and the occasional massive tax-payer funded bailout.

AnyFuleKno · 16/06/2011 21:17

starmucks, running branch networks is part of servicing customers.

BerylOfLaughs · 16/06/2011 21:18

Change to First Direct. I've been with them for 13 years with no problems and they have the best customer satisfaction of all banks.

LoveBeingAbleToNamechange · 16/06/2011 21:24

Increasing their balance sheet ie credits is a focus of rbs, I am certain they are not sacking you due to this. You have account that you pay for and have started saving with them. Btw please review how you can make the most of that account or cancel it.

Can I ask have you apied for a refund of account fees or PPI?

MrMan · 16/06/2011 21:28

malinois I agree with your general point, but every bank right now puts their deposit:loan ratios on the first page of their annual report, both for stability reputation and also the fact that deposits do increase revenue substantially when you compare the interbank lending rate against the non-existent interest rate given to consumers. So I think it is fair to say that perhaps they don't need more than a certain percentage deposits they certainly want the number to be as high as possible.

tortilla · 16/06/2011 21:29

Yes, lie was really weird phrasing, anyfulekno. I pressed post without previewing otherwise I would have changed it. I had no intention of being passive aggressive, but it totally reads like I am! I think 'bit of a myth' was how I thought it in my head, and 'lie' was somehow how I typed it out :)

Re MrMan and malinois, I know it's not the only way they fund lending, but it is one of the ways they do it, however tiny a percentage of their lending it may now make up, and therefore if you are in credit you are actually valuable to them, even if they might make more off somebody in debt. After all they don't just have a little box of tenners that has your name on it that they never touch except when you access your account, do they? They do do stuff with it to make themselves money. So as a customer you have every right to question why they are ditching you, especially if you have actually also been paying £7 a month for the privilege of them using your money...

I'll retire from this now. Don't think I have the brainpower this evening to write what I mean very well :)

starmucks · 16/06/2011 21:36

A cost to service some customers, but not all. I only bank remotely. In fact customer retention is now more aligned to providing alternates to visiting the branch than providing an expansive physical presence.

tyler80 · 16/06/2011 21:37

Sometimes they just don't know what they're doing

I got a letter from my credit card company

"As responsible lenders blah blah reviewed your account blah blah close next month"

I rang up to ask what would happen to the 5 pound credit on that account and they explained they would send a cheque so I closed the account there and then. A few days later

"We're sorry that you're leaving us, please could you spare a second of your time to let us know blah blah blah reconsider your decision blah"

Well I wouldn't have left if you'd not told me you were going to close my account!!

MrMan · 16/06/2011 21:44

I think that what may have happened is that OP has been flagged in the system as what is known as a 'barnacle', which is someone who has been with the bank for a long time, has not created much profit for the bank and does not show signs of increasing the profit. This is a side-effect of bank customer service being run by spreadsheets these days.

In the good old days, banks treated all customers equally and charged everyone the same fees. Then they came up with the concept of 'customer segmentation' which basically means identifying the people they like the most and treating them very nicely, looking at the mid-range and encouraging them to become more like the likeable people, and trying to off-load the low-range. There are people who charge a lot of money to come up with more complicated versions but that is the basic idea.

Original poster
TiffanyToothache · 16/06/2011 21:46

Sorry - Ds woke up.

I pay £7 per month because I'm an eejit. It's a royalties account so I get so-called benefits like discounts on concert tickets and mobile phone insurance - but I have never once used the benefits. You are right, I should have switched to a free current account years ago, it has been on my procrastination to do list. See, they've made quite bit out of me that way alone!

No to reclaiming PPI - because I always declined it when getting loans.

The only recent changes are my salary and opening a savings account with them.

OP posts:
Original poster
TiffanyToothache · 16/06/2011 21:47

So what would be the profile of a desirable bank customer?

OP posts:
Original poster
TiffanyToothache · 16/06/2011 21:49
OP posts:
mercibucket · 16/06/2011 21:57

change bank and get £100 for changing! much better deal. I went to first direct and got £100 for changing and they are a brilliant bank - recommended

AnyFuleKno · 16/06/2011 21:57

exactly MrMan.

Tiffany I advise that you kick off big style and try and claw some of your fees back, if you do decide to leave.

However, all banks do this on some level, some are just less blatant.

You defo need to switch to an account without a service charge though.

Original poster
TiffanyToothache · 16/06/2011 22:01

3 votes for First Direct then :)

I shall certainly kick off big style if there's no mistake and they're just dumping me because I don't fit the profile. If there is some mistake I shall take the opportunity to switch to a free account.

I'll try and speak to them tomorrow but tricky day at work - will keep you posted!

OP posts:
EggyAllenPoe · 16/06/2011 22:06

i find it hard to believe it is costing them £7 per month to run your account - and that's what you are paying for it. This may turn out to be a mistake (or, they should have sent you another lettter saying 'we want you to close this account..and open this one!'

will be interesting to find out.

RollingInTheAisles · 16/06/2011 22:07

I think First Direct are recently requiring a deposit of at least £1500 a month for a current account, just in case that's relevant. I may be wrong. We've found them a great bank too.

MrMan · 16/06/2011 22:10

Eggy, part of the issue is that customers have to provide enough profit not only for their own servicing, but also to pay for advertising, branches, cashpoints, executive conferences in Hawaii and all the other expenses of the bank. So their desire for how much of your cash you transfer to them each year is pretty high.

HavePatience · 16/06/2011 22:15

Please name the bank. Smile

Original poster
TiffanyToothache · 16/06/2011 22:22

I did dear :)

OP posts:
EggyAllenPoe · 16/06/2011 22:27

but it still doesn't make sense to sack the customer - sell them a different product perhaps - but not sack them.

for instance, they could have offered her an internet-only account, or downgraded her account priviledges...etc...

as it is, the OP will go to another bank, and that bank is likely to make money out of her.

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