OFT steps up bank charge investigation

30 March 2007
Consumer groups have welcomed the announcement from the Office of Fair Trading (OFT) that it will extend its preliminary investigations into the charges banks impose on customers for unauthorised overdraft withdrawals.

Promising to conduct an "in-depth study" into bank charges, the OFT will establish whether any upper limit needs to be set for the amount banks can ask of customers and rule on whether customers charged previously are eligible for compensation.

"It is good to see that the issue is at last being addressed," uSwitch.com's director of financial services Nick White commented.

But he added that this seemed to be "an extremely slow-moving process", with the latest announcement coming seven months after the OFT first launched its investigation into the issue.

Meanwhile, customers are continuing to pay high charges on overdrafts and other defaults, Citizens Advice social policy officer Peter Tutton remarked.

In December, the BBC's Money Programme found that the average penalty charge banks impose is £30 – more than six times more than the £4.50 it costs banks to deal with customer defaults.

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