ULSTER Bank has been accused of sending "insulting" letters to customers who have managed to avoid bank charges up to now writes Charlie Weston Personal Finance Editor
The bank told them they will no longer be able to avoid the fees from the middle of this month.
At the moment, current account customers can get around paying a monthly maintenance fee of €4 by putting €3,000 into their account each month.
Alternatively, customers can keep a balance of €3,000 in the account at all times and avoid the monthly charge.
But from September 19 next, the only way to escape the fee will be to keep €3,000 in the account at all times. Ulster Bank calls this a fee waiver.
The customer letter states: "We notice that you've been able to avoid paying this fee for the past few months by lodging at least €3,000 into your account and therefore meeting this waiver.
"From 19 September 2014 you will no longer be able to avoid paying the fee in this way." The change in the fee structure means 50,000 of the bank's 600,000 customers will be hit by fees for the first time.
The letter outlining the change has been described as insulting and dispassionate by chief executive of the Consumers Association Dermott Jewell.
"The tone is appalling and insulting. It is totally dispassionate," Mr Jewell said.
Most banks now require customers to keep a credit balance in their current accounts to avoid fees.
Calculations on the Central Bank figures by Simon Moynihan of price comparison site Bonkers.ie show that since the beginning of the year €2.25bn has come out of savings accounts, and €2.27bn has gone into overnight accounts, which include current accounts to avoid fees.
He said this meant that people are moving huge amounts of money from deposit accounts into current accounts to escape paying current account fees.
"Although the Central Bank does not give specific statistics for current accounts, I think that it is reasonable to assume that people are taking money from their savings accounts and using it to cover the fee waiver for their current accounts, thus providing the banks with free deposits.
"In fact, since the beginning of the year, the amount of money in overnight accounts has grown every month and the amount of money in term accounts has fallen every month," Mr Moynihan said.
Ulster Bank customer Brian Parker was so annoyed by the letter he has switched his banking to Permanent TSB.
The IT consultant, who is based in Cork, has written to Finance Minister Michael Noonan about what he regards as a "shameful" move by the bank.
"The letter seems to say, "we are going to get your money', "he said.
Ulster Bank's only response was that it is withdrawing one of its fee waivers and said it does not levy transaction fees.
This was flagged in its branches, in national press ads, in letters to our customers and in a previous Irish Independent article, a bank source said.
Bank of Ireland requires its current accounts to have a credit balance of €3,000 at all times to avoid transaction charges.
AIB requires customers to keep a credit balance of€2,500 to avoid fees and charges.
KBC Bank will only waive ATM and cheque processing fees if customers maintain a minimum credit balance of€2,000 in their account. Permanent TSB requires customers to lodge €1,500 a month to avoid fees.