21 February 2007
British current account holders are being warned to check their statements this week after Citibank announced that it would automatically be upgrading all its current account users to a Citibank Plus account.
Once the initial three-month cost-free trial has run out on May 1st, customers who have not chosen to opt-out of the scheme will be charged £10 per month for using their current account.
What's more, the customers of Citibank are only offered a measly 0.1% AER for in-credit accounts which is hardly competitive compared to other current accounts on the market, such as the Halifax Ultimate Reward Current Account, which offers the highest in-credit interest rate currently available at 6.17% AER.
Research carried out by the price comparison and switching website uSwitch.com revealed that 1.3 million UK current account holders believed they had been automatically upgraded to a fee-paying packaged account.
Nick White, Director of Financial Services at uSwitch.com, said that he was concerned that customers who weren't made aware of the practice could end up unwittingly paying for their banking service.
"Regardless of the number of people affected, the introduction of this type of practice is bad news for the consumer," he said.
"It reiterates our message that people need to remain one step ahead of the banks as this is one of many pre-emptive moves we will see the banking industry make prior to the OFT's impending current account investigation."