Barclays is tacitly rewriting terms and conditions to allow savers and checking account customers to charge new fees when interest rates go negative
Barclays has tacitly rewritten its terms and conditions to allow savers and checking account customers to charge new fees.
As part of the changes, Barclays may introduce a new cap on the amount of money customers can keep on each account free of charge. It can then start charging customers who are holding deposits above this level.
Writing on the wall: Barclays may introduce a new cap on the amount of money customers can keep on each account free of charge
One source insisted that Barclays had no plans to use its new powers, which were introduced without fanfare in November 2020 – a month after The Mail announced on Sunday that banks were updating their computer systems to address the prospect of negative interest rates prepare.
It is believed that a number of competing UK lenders have hired lawyers to make similar changes to their customer terms and conditions.
Bank of England officials have asked all lenders to be prepared for negative interest rates by August in case drastic measures are required to stimulate the economy. However, experts fear that the blanket changes in business conditions could pave the way for banks to increase their revenues by introducing new account fees, even if interest rates never drop to zero or below.
Economists expect Bank of England heads to hold rates at 0.1 percent when they meet this week.
Barclays first introduced a cap on the amount customers can keep on each account free of charge in 2015 when it began charging customers who had deposited more than £ 10 million in their Everyday Saver account.
The new terms state: “We can also set a maximum amount that you can keep on all of your accounts with us, including joint accounts.
“Once we have set such a maximum, you must ensure that payments to your account do not take your account balance into account.” If your balance exceeds the maximum, we may charge a fee. Or we will refuse to accept a payment into your account and send it back to you. ‘
A spokesperson said: “Our terms and conditions are designed to give customers a clear understanding of their banking relationship with Barclays, how it works today and what it might look like in the future.”
Legal sources told the Department of Defense that banks are considering a variety of wording to allow them to charge new fees. Some contracts would only allow banks to charge fees when interest rates turn negative, others might give lenders the power to charge fees when they see fit.
All of the major lenders have stated that they have no intention of charging ordinary retail customers when negative interest rates are introduced. Instead, they want to target corporate clients and wealthy individuals.