Bank customers 'pay £4.7bn overdrafticon fees'

BANKS forced customers to pay £4.7billion in overdraft charges last year, according to study published today.
The research piled further pressure on Britain's 'Big Five' banks to cut the fees imposed on people who go into the red.
Government watchdogs pledged to take legal action against banks that did not slash feed, but the banks refused to back down.
The study, by consumer magazine Which?, found that banks charged an average of £20 to £30 for account holders who exceeded their authorised limits.

Customers who typically charged £25 to £30 on top of that for standing orders or direct debits paid out while over their limits.
HBOSicon, Royal Bank of Scotland and Natwesticon were named abd shamed as the toughest on overdrawn customers.
They each imposed a £118 penalty for account holders going £50 over a £250 limit for three days, researchers found.
Abbeyicon had the second highest charges for the same scenario, at £110, while Northern Rock had the lowest charges, at £28. The Office of Fair Trading has threatened court action against any banks charging more than £12 for exceeding overdraft and credit card limits, from today.

But the British Bankers' Association demanded a showdown meeting with the OFT late next month before any reforms.
It said: 'Banks are commercial institutions and are entitled to decide their own charges. These are made in agreement with the individual customer signing up.'

Which? said: 'It's time for banks to start treating customers fairly by reducing their excessive charges. Charges should cover only the banks' true costs of dealing with late charges and exceeding overdrafts.'

Eddy Weatherill, of the Independent Banking Advisory Service, added: 'The industry is not being policed enough-any charge over £5 seems excessive.

'Customers are being plundered-and, no doubt, the banks will find another way to get their money even if charges get capped.'


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