uSwitch.com comment on Citibank's latest move

Nick White, Director of Financial Services at uSwitch.com comments on Citibank's move to automatically upgrade their Sterling current account customers to a Citibank Plus £10 a month packaged account:

"Citibank's decision to automatically upgrade current account customers to the Citibank Plus packaged account, which costs GBP120 a year, is an interesting business practice to say the least".

"Although customers do get the option to opt-out, and, to their credit Citibank are also offering a three-month free trial as part of the process, it is inevitable that some customers will end up with a fee-paying packaged account they don't want and be GBP120 lighter in the pocket.

Interestingly, they are also introducing the free Citibank Access Account".

"Surely it would be fairer and more logical to transfer customers to this account and allow them to choose to upgrade to the new fee-paying packaged account if they feel it would be beneficial".

""Both the Citibank Access and the Citibank Plus current accounts offer an in-credit interest rate of just 0.1% AER, which is not competitive against other free and packaged current accounts available.

The fee will be implemented from the 1 May 2007 following the three-month free trial and customers will receive letters both this month and next explaining the 'changes to the terms and conditions'".

""Research carried out by uSwitch.com1 last year revealed that 16% of people (1.3 million) believed they had been automatically upgraded to a fee paying packaged account and this is further evidence that this practice continues".

""With one million UK customers across all products2, Citibank does not have a large share of the current account market.

Regardless of the number of people affected, the introduction of this type of practice is bad news for the consumer.

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".

""Citibank's decision follows closely after first direct's implementation of a monthly fee on its account for people that do not comply with the new terms and conditions introduced this month".

"Today also sees the launch of Halifax's Ultimate Reward Current Account which offers the highest in-credit interest rate currently available in the packaged account market at 6.17% AER." Best high street current accounts available with branch access Provider Account Feb-07 AER Abbey The Abbey Current Account-Preferred in credit rate 6.3% Halifax High Interest Current A/c (authorised overdraft rate of 15.90% EAR) 6.17% HSBC * Bank Account Plus 6% (tiered) Coventry BS First 5.85% Nationwide Flex Account 4.25% Average in-credit interest- % gross andnbsp; 5.31% Source: uSwitch.com - correct as at 19th February 2007 *Introductory offer - 6% AER for the first 6 months.

www.uswitch.com For more information visit www.uswitch.com or call 0800 093 06 07.

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