UK banks still robbing customers with unauthorised overdrafts

Banks in the UK are still robbing their customers blind with the charges on their unauthorised overdrafts, some of which can actually cost consumers more than taking out a instant cash loan, industry experts say.

There has been little headway made on reforming the banking fees, even after a five-year legal dispute and a Government clampdown on unfair practices.  In fact, many consumers are still paying the eye watering charges from their banking providers, according to a newly published report from consumer advocates Which?

The report from the consumer group says that even though the Government has instituted regulations to put unfair bank charges at an end, consumers can still see hundreds of pounds in fees if they go into the red – and these fees are much more than it would cost to repay a payday advance from a non-traditional lender.

The charges are incredibly complex, the report says, making it difficult to compare different providers or work out to what the final costs would be.  This differs from payday lenders, who will charge a flat rate of anywhere from £10 to £25 per £100 borrowed for taking out one of their quick loans.

Which? chief executive, Peter Vicary-Smith, stated that the reforms announced by the Government designed to reform the overdraft charges simply don’t go far enough to eliminate the issue, adding that banks charge such complex fees that not even a maths PhD student could decipher them easily.  Banks such as Lloyds TSB charge £5 a day for overdrafts of £25 or less, with the fee rising to £10 for balances over £25, and then charge a £5 monthly fee in addition to the daily fees – and then individual fees of £10 for failed direct debits and standing orders or bounced cheques for transactions in excess of £10.

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