These men grab Pounds 3billion a year for your mistakes BANKS are making Pounds 3billion a year from our slip-ups. When we accidentally go into the red, they slap on charges. But these, which can be up to Pounds 39 a time, appear to be out of all proportion to the costs the banks incur. Now, at the start of a new campaign, Money Mail charges the banks with six crimes against the banking public.
OVERCHARGING
THE CHARGE: We allege that most transactions are automated and that the cost of running overdrafts is much less than customers are being charged.
One in four of us goes overdrawn every year. When you take an unauthorised overdrafticon, you will first be hit with a fee of around Pounds 30. This might be a one-off or it could be charged on a weekly or monthly basis.
Then you'll be charged every time a payment is bounced or let through, or when you make a withdrawal. This can be between Pounds 25 and Pounds 39 a time, depending on the bank.
You'll also be charged between 15 pc and 30 pc interest on the extra money you have borrowed.
These high rates are supposed to reflect the added risk of an overdrawn customer.
But the Office of Fair Trading says that Pounds 12 a time would be a fairer charge for running unauthorised overdrafts.
OUR REMEDY: Lower charges. The banks refuse to say how their charges are calculated. Unless they can prove it costs more to administer an account, charges should be capped at around the Pounds 12 level suggested by the OFT.
THE BANKS' DEFENCE: The British Bankers' Association claims the OFT's figure is not correct and says it has not conducted proper research into overdraft charges.
Banks say there is an administrative cost of handling overdrafts; transactions must be refused or declined and credit status checked.
But this defence ignores the fact that most transactions are automated.
PROFITEERING
THE CHARGE: Consumer group Which? estimates that bank charges are putting Pounds 3 billion into the pockets of the banks every year.
Charges can often be wholly disproportionate to the amount overdrawn.
Money Mail readers who have gone overdrawn by a few pence or for a few hours have, in some cases, picked up hundreds of pounds worth of charges.
Frequently, at the end of the month the charges will tip the customer back into the red, making them incur more charges.
THE REMEDY: A restriction on charges that put customers back into the red.
If necessary, charges should be put into a separate overdraft account to prevent this from happening. Charges should be proportionate to the size of the misdemeanour.
THE BANKS' DEFENCE: Banks say that the majority of customers, who do not go into an unauthorised overdraft, should not have to foot the bill of overdrawn account holders. They say letters are sent in advance of charges being taken.
LACK OF COMMUNICATION THE CHARGE: Banks claim their charges are not automated. If this is the case, then why do they fail to make contact to warn customers that they are about to go overdrawn or that they are incurring charges? By allowing customers, sometimes on very low incomes, to keep spending without making contact, they are contributing to their difficulties.
THE REMEDY: Banks should send texts or emails warning when a transaction will put a customer overdrawn. There should be a Pounds 100 limit on charges until the bank has spoken to the customer or the account is frozen.
THE BANKS' DEFENCE: It is not the banks' responsibility to manage customers' accounts. They say that customer service staff will see only the positive or negative balance at the end of each month and so authorise payments or charges as appropriate.
OVERCOMPLICATION THE CHARGE: There are far too many charges and it is difficult for customers to understand how much they could be charged and when. Indeed any details given can be hidden in the small print. When charges are made it can be difficult to understand what they are for.
THE REMEDY: There should be a shorter and simpler tariff of charges. Summary boxes on bank statements should detail the main charges. Cash machines should warn of the charges involved when a withdrawal will put a customer overdrawn.
Clear letters should explain precisely why charges have been made, how much will be charged and when the money will be taken.
THE BANKS' DEFENCE: Banks claim customers are sent updates on charges and it is not the fault of the bank if these letters are ignored.
INTRANSIGENCE
THE CHARGE: Banks fail to take complaints seriously. An acknowledgement may be sent but not enough action appears to be taken.
A large proportion of complaints to the industry regulator, the Banking Codeicon Standards Board, are actually about the complaintshandling procedure.
Customers feel they are fobbed off with excuses rather than having their problems properly investigated and resolved.
Some banks clearly hope the customer will give up on their dispute if they are ignored long enough. Often those who complain loudest, threaten court action or have the most financial know-how will have any charges refunded while the less financially able must cough up.
THE REMEDY: Charges to accounts should be suspended while a customer complaint is being investigated. Banks should treat all complaints fairly and abide by the spirit rather than merely the letter of their own Banking Code.
THE DEFENCE: Banks insist that they adhere to the Banking Code and have proper complaints procedures in place. They maintain that all complaints are taken seriously.
EXPLOITATION
THE CHARGE: Lower earners and the less financially aware are hit hardest by bank charges. A single Pounds 50 charge can represent a huge proportion of the weekly wage packet of a young earner.
One mistake can send a youngster into serious trouble, yet we see little evidence of any understanding from the banks.
Lower earners are also more likely to make a lot of small withdrawals, incurring charges each time and increasing the chances of them running up a large debt.
Many banks seem unwilling to offer the flexibility, help and support needed to get out of this downward spiral until fees amounting to hundreds or even thousands of pounds have been amassed.
THE REMEDY: Fees should be lower for all those under 21 and banks should make contact to discuss debt with those in this age group before fees can breach Pounds 50.
THE DEFENCE: Banks say they are willing to work with debt counsellors to help customers.
Telephone numbers of these agencies are printed in The Banking Code.
TELL US YOUR STORY
WE WANT to know about your experience of bank charges.
Have you incurred charges from a simple mistake? How did your bank react to your complaints?
Email: j.coney@dailymail.co.uk or write to Bank Charges, Money Mail, 2 Derry Street, London W8 5TT.
We will need to know your name, address and daytime phone number, which bank you are with, how much you went overdrawn, how and when charges were applied and what the bank's attitude was when you complained.
Pounds 7.80 OVERDRAWN - Pounds 150 CHARGES
STUDENT Daniel Ling has racked up Pounds 150 worth of charges after being overdrawn by less than Pounds 10 for just 15 hours.
Daniel, 20, an architecture student at Plymouth University, paid Pounds 7.80 for a round of drinks at the pub one evening. The following morning, he looked at his account online and realised he had used the wrong debit card the previous night and gone overdrawn. He immediately transferred Pounds 10 into the account to put himself back in credit.
More than one month later, Daniel (pictured right) checked his account online and found a Pounds 20 overdraft charge and Pounds 30 charge for authorising a payment had been taken from the account. This had sent him back into the red.
He complained to Abbeyicon, which agreed to refund Pounds 30, but because the charges had put him overdrawn he was charged another Pounds 50. And while disputing the charges over the course of a month, he racked up a further Pounds 50 worth of charges.
Daniel says: 'This is a nightmare. Abbey can't seem to appreciate that I am living on a tight budget and that most of these charges have accumulated because of their actions.' After Money Mail contacted Abbey it refunded Daniel's charges. Abbey says: 'We do expect customers to manage their accounts effectively but it is not our intention to disadvantage customers for one-off oversights.'
Pounds 80 CHARGES
CONFUSION over her overdraft limit led to Daisy Broadbelt picking up Pounds 80 worth of charges she could ill afford.
Mrs Broadbelt, 47, from North London, saw her monthly income fall from Pounds 1,300 to Pounds 700 when her grown up children, who were paying rent, moved out. Abbey spotted the change and cut her overdraft from Pounds 2,000 to Pounds 1,500 the following month. The bank also asked her to repay the Pounds 500 difference. Mrs Broadbelt (pictured) explained that she could not repay that amount and asked for the overdraft to stay the same until she could start a new job as a taxi driver, a month later.
But Abbey turned down her request, putting her beyond her authorised borrowing limit and charging her.
Mrs Broadbelt says: 'It was ridiculous as they were acknowledging that I had less money but at the same time asking me to pay more.
I was just getting my finances back on track when they put me back to square one.' Abbey has now refunded the charges and is in discussions with Mrs Broadbelt about managing her overdraft.

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