Bank charges Chichester charity for account

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A Chichester charity was left stunned after its bank said it wanted to charge it for using its accounts – for the first time in 172 years.

Chief executive of the Shipwrecked Mariners’ Society (SMS) Malcolm Williams said the Royal Bank of Scotland’s (RBS) decision was no way to repay its long-standing loyalty with the bank.

The charity was told it has free banking until August – but after then it will be stung with charges amounting to £6,000 per year.

The SMS was told the processing of cheques, which are right at the heart of the charity in the way it operates, was now too costly for the RBS.

The bank charges charities with an annual turnover of more than £100,000.

“What I find odd is the mood music played by the bank to its customers, saying they are there to help out,” Commodore Williams said.

“The implication is it will do what you need for your business, but when it comes down to it unless it fits in with their approach to things, then actually they are not in a position to help you.”

He added: “We would argue we have had significant positive balances with the bank, except during the first and second world wars. They would have made a lot of money out of us.

“This £6,000 comes at a time when donations to us are down, because we are in a recession. Who had a significant responsibility for the recession? The banks.”

The SMS, based at 1 North Pallant, is a charity which gives assistance to shipwrecked survivors who have landed on the coast of Great Britain and Ireland.

Its main purpose today is to give financial support to retired or permanently-disabled fishermen and mariners, and to their widows and children in need.

Commodore Williams said the charity has had an annual turnover of more than £100,000 for decades, which is why he was stunned to hear the bank now wants to charge for use of its accounts.

He added he was told in 2009 by the RBS if the charity opened a deposit account, then that would be seen as off-setting the bank charges. A year on, the bank said it could no longer do that.

Commodore Williams wrote to the bank in September 2010 and again in November, and called them in December last year. He heard nothing back.

It wasn’t until last week the charity received a letter from the bank explaining it would put a moratorium on charging SMS until it decided whether to change from using cheques to BACs (automated payments).

A RBS spokesman said: “We advised the Shipwrecked Mariners’ Society in July 2010 their annual turnover was now significantly above the £100,000 threshold for our free banking for charities.

“At the time we outlined a number of options which would enable them to minimise account charges and therefore maximise the funds they had available to help their cause.

“We extended their free banking until November 2010 to give them time to make these changes. Unfortunately none of these suggestions was taken on board.

“We have now agreed to extend the free banking further to give them more time to make any changes they wish to and would urge them to discuss these with us.”

Commodore Williams responded: “We have taken their proposals on board but they do not meet our requirements.”