Charges for Overdrafts Are Soaring; Money Mail
Byline: JAMES CONEY
BANKS have hiked their charges for current accounts and overdrafts by over 15 pc in the last year.
The figures were unearthed by think-tank the Centre for Economics and Business Research trawling through October's inflation figures published by the Office of National Statistics.
This backs up evidence coming into Money Mail of banks taking a tougher stances on fees and whacking on huge fees for tiny misdemeanours.
In recent weeks HSBC has increased its penalty for unauthorised spending from [pounds sterling]20 to [pounds sterling]25. This 25 pc increase is over nine times the current rate of inflation. NatWest increased its from [pounds sterling]35 to [pounds sterling]38, Lloyds TSB has recently hiked its unauthorised overdraft fee from [pounds sterling]25 to [pounds sterling]30 and Halifax increased its charge for returned items to [pounds sterling]39 from [pounds sterling]35.
Since exposing unfair and excessive charges last month Money Mail has been flooded with letters from readers who have been forking out for overdraft charges racked up without their knowledge.
Money Mail is passing on a number of cases it has received to the Office of Fair Trading, which is watching the way banks charge.
Among these are that of a 74-year- old pensioner who faced fines totalling [pounds sterling]150 after going less than [pounds sterling]100 overdrawn.
The woman, who is disabled and finds it difficult to get to her branch, had paid for vital house maintenance and then forgotten her council tax was about to leave her account.
She had been a customer of her bank for more than 30 years and never previously gone into the red. After Money Mail intervened, Abbey agreed to refund her money.
A common complaint is that charges of [pounds sterling]30 are commonly imposed on customers who have gone into the red for a matter of hours and then only by a few pounds.
When they complain they are told that they should have known how much they needed in their account, even though the money taken out is for a bill, such as for the telephone, that fluctuates each month.
But the chief executive for the Centre for Economics and Business Research, Douglas McWilliams, says: 'If you disagree with charges it is likely that you will have unauthorised borrowing and that will not make it easy for you to get a different bank account. …