AIB plans to introduce new charges by stealth

AIB customers who have enjoyed "free" banking will see their privileges come to an end under plans

The group, which last month posted profits of €1.4 billion for 2002, will soon impose charges on customers who were previously exempt once they kept their current accounts in credit by a minimum of €500 each quarter.

It is claimed that the charges will hit services including ATM transactions, direct debits and standing orders, as well as branch transactions, cheques, lodgements and withdrawals. Reports cited an AIB source as stating that the announcement of charges would be "cloaked" with a simultaneous announcement of plans to start paying interest on current account balances to personal customers.

It is believed the proposal is under examination by the Director of Consumer Affairs. Last week, the High Court backed a case taken by the Director of Consumer Affairs against Bank of Ireland in relation to charges on its Amex Blue credit cards and its internet service Business-Online. Carmel Foley sought approval of an order against the bank to halt the charge. The bank had objected to the director's right to review previously approved charges after a given period.

Thousands of BOI customers are expected to be in line for a refund of charges as a result of the case. A spokesperson for AIB could not be contacted yesterday to confirm details of the proposed new charges.

However, the group's website continues to advertise the "free" banking service for current account customers with a minimum balance of €500 throughout the quarter. Full-time students and people over 60 are also exempt from charges with AIB. AIB's standard current account maintenance fee per quarter is €4.50.

However, charges can mount when transactions, including direct debits and ATM withdrawals are taken into account. Paper transactions are charged at 0.30 cent each. The decision to impose the new charges may spark a reaction from other banks, who may in turn decide to impose charges on accounts that were previously exempt.

Alternatively, competitors may play on AIB's charges to attract new business.