HSBC favours First Direct Customers

[TANZARELLI]

HSBC favours rich First Direct Customers

by MoneyDoctor Friday 24 October, 2008
With First Direct being a part of the HSBC group, you would think that customers of both would receive equal treatment.
Think again!
Last week those of you who borrow from HSBC were told that the Bank of England's base rate cut of 0.5% would not be passed on.
However, those of you with First Direct will benefit from the cut and still get better savings deals.

• HSBC customers get a raw deal

Also, if you are an HSBC customer and you don’t pay in at least £500 a month, you will no longer get a monthly paper bank statement; you will only get one every quarter.
Also, when they give you a new bank card, it will no longer be able to guarantee cheques. You will only be able to write a cheque to pay for goods only by post, where a guarantee card is not requested.
And to top it all, you will no longer get any interest on your current account which follows First Direct’s move in September 2007.
Thanks HSBC!
Oi banks! Pass the rate cut onto us!
It is two years since First Direct got rid of their poorer customers by introducing a £10 monthly fee on its current account for those of you who did not pay in more than £1,500 a month.
Around 200,000 of you then then left First Direct!

• First Direct mortgage customers better off

However, in the past year First Direct has offered some of the best-priced mortgages; its standard variable rate is 5.5%, the lowest around.
HSBC's is 6.25% which, though higher, is still the second best behind Nationwide at 6.19%.
HSBC says it has only a few customers on its SVR. However, it does have many who were enticed by its 2 year discount mortgage that was on offer between July and September. They paid a whopping £2,499 fee to get an initial rate of 4.99%. The discount was 1.26% below the bank's SVR.
However, as a result of the rates freeze, if you had a £150,000 mortgage you have missed out on a cut in your repayments of £44 a month.

• First Direct savers better off too

Even though First Direct savers have seen their rates slashed, they, too, are often getting a better deal on most accounts than those of you with HSBC.
First Direct's e-Savings account pays 3.52% after 20% tax (4.4% before tax), HSBC's online saver pays 3.4% (4.25%) and is now closed to new customers. First Direct's regular saver pays 6.4% (8%), but customers in HSBC's standard current account can't get a similar product.
Compare savings accounts.
It is also clear that well-heeled customers of internet-bank First Direct are getting a better deal than their poorer relations at parent company HSBC. Those in HSBC's Current Advance, which requires you to pay in £500 a month, get the 6.4% (8%) rate, and wealthier customers in its Premier, Plus or Passport accounts get 8% (10%).
HSBC's cash e-Isa pays 5.75%, while with First Direct you can get 6.125% fixed until June 15, 2009. The cash Isa for regular savers at HSBC pays between 3.75% and 4.3%, but with First Direct you can get a huge 7% if you pay in between £25 and £300 a month.
HSBC denies that its customers are getting a raw deal saying:

'We do own First Direct, but it is also a competitor. When we make decisions about our standard variable rate we have to take into account the risks in the market at that moment. First Direct will make its own decision.'

http://www.moneyhospital.co.uk/blog/...mers?cid=MH204