Internet bank First-e has scrapped a TV campaign two weeks before it went on air, blaming rising competition between online banks.

According to UK manager Richard Thackray, the number of online banking services currently advertised has driven recruitment costs for each new customer to £250. “It is just not economic to pay that”, he complained. “We are increasingly reluctant to spend money in the media market”.

First-e, a unit of Dublin-based Enba, will have to pay a hefty cancellation fee to its London agency Fallons. However, Thackray denied rumours that this could be as high as £1.1million.

He went on to attack advertisers’ sceptical attitude towards internet businesses. “One of the problems we have as a dotcom is that because we have no credit history we have to pay three months in advance”.

Thackray denied that First-e would “do a Boo”, adding: “We have got plenty of cash but we are being very prudent. We want to be here in five years' time, not be a blazing comet.”

News source: Financial Times