Business Bank Charges are Customers’ Biggest Gripe
A new report for YouGov SixthSense suggests that business bank charges are the foremost consideration when SMEs are looking for a new current account. This should come as little surprise to many – the past three years have seen the number of current account related complaints to the Financial Ombudsman balloon compared to the numbers in 2005 to 2007, with 25,252 complaints made in 2010.
The report coincides with the arrival of service-focused Metrobank and follows Santander’s recent cash incentive to switch providers, both of which have sparked consumer interest in the lowly bank account.
54% of YouGov respondents agree that fines relating to exceeding an overdraft are “legitimate”, making it the most acceptable form of bank charge. However, only five per cent of customers are willing to tolerate monthly banking fees for banking services like debit cards, direct debits and standing orders.
Speaking on the findings, Research Director for SixthSense, James McCoy, said,
“The greatest acceptance of charges for exceeding overdraft limits currently lies with those who are happiest with their banking service. It also seems that consumer perception of banking institutions hinges greatly on the consumer’s understanding and acceptance of certain bank charges – it would appear that an informed accountholder is a happy accountholder.”
Despite consumer dissatisfaction, there is evidence to suggest that account holders are not doing enough to inform themselves of the risks involved. 40% of YouGov respondents say they have not fully read their account’s official documentation, but “broadly” know what they may be charged, and in what circumstances. 1 in 5 account holders report that they have read the documentation in the past but “can’t remember it now”; while only one in four account holders claim that they have read all the relevant documentation and understand when and why charges may arise.
As a final word on the issue McCoy said,
“At present, when consumer confidence in financial institutions is at its lowest ebb for over 60 years, there is good reason to re-evaluate retail banks’ relationship with their customers at its most fundamental level: the current account.”
For more information see our business advice article Checking your Business Bank Charges are Correct.