Cutting the Cost of Fees for Unauthorised Bank Overdrafts
Byline: By Matt Williams Special Correspondent
Banks are facing increased pressure from regulators and consumer groups over the high fees they levy on unauthorised overdrafts.
Reports of charges in excess of pounds 30 being slapped on people who go over their agreed level of borrowing by just a few pennies have led to a allegations of banks ripping off customers to boost profits.
A growing consumer revolt over "illegal" charges has seen pressure put on an ongoing investigation by the Office of Fair Trading (OFT) into the issue, the results of which are due to be published in the coming weeks.
The OFT could decide to cap fees levied by banks, but in advance of any ruling there are a number of things consumers can do already to cut the cost of penalty fees.
The simplest way to avoid "unfair" charges is to avoid giving banks the opportunity to impose them. By keeping within your agreed overdraft limit you could be saving yourself hundreds of pounds a month in charges.
Keep on top of your monthly finances. Knowing when your direct debit payments go out and ensuring that you have enough money in your account to cover them will avoid unnecessary financial difficulties.
If you think you may have difficulty making payments then speak to your bank manager at the earliest opportunity. They may be able to help you avoid further charges or increase your overdraft limit.
If you are prone to going over your agreed limit and are not going to take steps to change, then shopping around could see you get a better deal. Fees levied by the major banks and building societies differ in structure and in the amount they charge. …