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July 2, 2007

NCC Berates Banks on Charges

Story link: NCC Berates Banks on Charges

The banking sector is once again facing criticism over its charges. The National Consumer Council has described the variety and complexity of current accounts available as a jungle and is particularly concerned for low-income account holders, who face charges of up to £39 for exceeding an overdraft limit.

The Council is recommending that regulators should ensure that information on bank statements giving details of interest charges should be presented with clarity.

It also wants the hidden costs of so called free banking to be investigated by the Office of Fair Trading, which it hopes will look particularly at basic bank accounts and consider whether they provide reasonable terms for the least well-off in society.

In addition, the Consumer Council has drawn attention to the fact that bank customers are frequently reluctant to switch accounts because of the complications involved and the fear that standing orders and direct debits could go unpaid during the switching process.

In response, the British Bankers’ Association has pointed out that whilst in many countries people pay for everyday banking transactions, in the UK account holders can avoid such payments by keeping their accounts in credit.

It has also pointed out that banks are likely to refund charges in cases where accounts have gone into the red on a single occasion because of a genuine error.

 

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