Banking News Bank Charges Soon Add Up 1651
Bank charges soon add up
28 May 2008 / by Rebecca Sargent
The research shows that some customers could be paying as much as £165 in bank charges for going £50 over an agreed overdraft limit. The information is based on a current account being overdrawn by £50 for a period of two weeks.
As part of the study, Moneynet.co.uk found that the average interest rate for an unauthorised overdraft is more than 23 per cent which is 10 per cent more than the average authorised overdraft interest rate.
The analysis covered eight of the major high street banks and found that the Lloyds TSB Classic Plus account charged the most at £165.36. The second most expensive was the Alliance & Leicester Premier Direct Account at a cost of £95 whereas the cheapest was the HSBC Bank Account that charged just £25.10.
According to Moneynet.co.uk, both Lloyds TSB and Alliance & Leicester had previously introduced daily charges for unauthorised overdrafts, however, the results show that these can soon add up.
Andrew Hagger from Moneynet.co.uk, said: “Increasing numbers of consumers are struggling to keep their finances in check, and are finding their bank accounts being put under extra pressure as they try to cope with soaring fuel and food costs.
“It is vital that people keep a keen eye on their current account balance, as the financial consequences of going into an unauthorised overdraft, making purchases without the funds to cover them or having items returned by their bank or building society will only inflame the already difficult situation.” he added.
As the banks involved in the Office for Fair Trading (OFT) bank charges case prepare to appeal the High Court decision to allow the OFT to investigate the fairness of overdraft charges, Mr Hagger offered advice to those who have not incurred massive fines in the past, saying:
“If you have already been charged banking fees, and it’s a one off, then try asking for a refund; it’s worth a try.”
© Fair Investment Company Ltd