Barclays quietly rewrites terms and conditions to allow it to impose new fees on savers and checking account customers if interest rates fall.
Barclays quietly rewrote its terms and conditions to allow it to impose new fees on savers and checking account customers.
Under the changes, Barclays can introduce a new cap on the amount of money customers can keep fee-free in any account. Customers who have deposits higher than this level can then be charged a fee.
The writing on the wall: Barclays can offer a new cap on the amount of money customers can keep fee-free in any account
A source insisted that Barclays had no plans to use its new powers, which were introduced without fanfare in November 2020 – one month after The Mail on Sunday revealed that banks were updating their computer systems in preparation for the possibility of negative interest rates.
It is understood that a number of competing lenders in the UK have appointed attorneys to make similar changes to general terms and conditions for clients.
Bank of England officials have asked all lenders to prepare for negative rates by August should drastic measures be taken to stimulate the economy. However, experts fear that sweeping changes in terms and conditions could pave the way for banks to increase revenues by imposing new account fees even if the rates do not drop to zero or below that.
Economists expect Bank of England chiefs to keep interest rates at 0.1 per cent when they meet this week.
Barclays Bank first introduced a cap on the amount customers can keep fee-free in any account in 2015, when it began charging customers who deposited more than £ 10 million into a daily savings account.
The new terms state: “We may also set a maximum amount that you can keep across all of your accounts with us, including joint accounts.
If we set a cap like this, you will need to ensure that any payments in your account do not take your balance above it. If your balance exceeds the maximum, we may charge a fee. Or, we may refuse to accept a payment in your account and return it 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 may look like in the future.”
Legal sources told the Finance Ministry that banks are studying a range of formulas to allow them to impose new fees. Some contracts only allow banks to charge fees if rates turn negative, but others can give lenders the authority to start charging fees when they see fit.
All major lenders said they do not plan to charge regular retail customers a fee if negative interest rates are offered. Instead, they intend to target corporate clients and the wealthy.