A&L hits cashback clients

ALLIANCE & Leicester is strong-arming credit card customers into signing up to its current account by scrapping cashback benefits on its Moneyback card.

The bank has written to thousands of cardholders warning that the 0.5% cashback deal will end at the end of February. Those customers will have the chance to retain the benefit if they sign up to the Premier current account.

Customers who already have a current account or mortgage deal with the bank will retain the benefits, as will select customers who only own the credit card.

The company would not give details on how many customers will have the benefits withdrawn or how those customers have been selected.

A&L will credit customers with their final cashback payment in March, but only if their card is still active at that time. It is likely A&L is using the data from its credit card customers to select the people it believes will be most profitable as current account clients.

Liverpool-based Ann Firth is one of those customers having her benefits withdrawn. The bank has also started to charge her a £2 cash advance charge and daily interest on the £20 she pays in advance to play the Littlewoods Pools.

She said: 'In addition to the charges now being levied at their cash machines, these seem to be more examples of how this bank is clawing as much money as it can from its customers in a stealthy way. Perhaps it should be renamed The Stealth Bank.'

An A&L spokesman said: 'We are withdrawing the benefits for a minority of customers. Those customers have the option of retain the benefits if they apply and are accepted for the Premier current account.'

A&L has been aggressively marketing its current accounts, attempting to draw customers away from the High Street banks with high interest rates and a 0% overdraft facility for the first 12 months after opening the account. It has recently offered a £20 incentive for customers to sign up to its Premier Plus account online.

A&L has been offering the Moneyback service since 1997 and has so far paid £100m back to its customers.

The bank has come under fire for a series of 'stealth' charges in recent weeks as the bank pursues its goal of operating predominantly online. It has slapped a £2 withdrawal fee on its Easy Access account, which is run through the branch with a passbook.

The company also has one of the largest networks of fee-based cash machines in the UK. It charges from 1,100 of its machines, while 1,400 are free. Since floating in 1997 the former building society has slashed branch numbers and driven a number of products online.