Leading banks seek to recoup charges
by Gill Montia
Story link: Leading banks seek to recoup charges
The High Street banks may yet turn out to be the victors in their battle with customers reclaiming charges for unauthorised overdrafts, by introducing a system already used in Australia and the United States.
Recent reports in the press suggest that so called free banking could end in the UK and customers could find themselves paying as much as £500 a year simply to operate a current account.
According to Moneysupermarket.com, the price comparison website, customers paying for each cash withdrawal, direct-debit payment, standing order or written cheque could face a bill of up to £300 a year.
This would apply to the average customer who makes about 35 transactions a month but the fees would increase to £500 for anyone making more than 50 transactions.
Leading retail banks are all looking at ways in which to recoup the revenue lost by the Office of Fair Trading’s ruling about excessive penalty fees for unauthorised overdrafts.
HSBC has so far paid £116 million in refunds, HBOS £79 million, Barclays £87 million, Royal Bank of Scotland £81 million and Lloyds TSB £36 million.
First Direct and Citibank have already introduced a monthly fee on some current accounts, whilst other banks are seeking different methods to make up their losses.
For example, the Bank of England’s 0.25% increase in the base rate in July has only been passed on by around half of leading savings providers.
Of those increasing savings rates, more than a third passed on less than the full 0.25 percentage point rise.
For some borrowers, however, overdraft interest rates have increased by almost one full percentage point.
Email This Post Print This Post
Add to Bookmarks:
Related stories to: Leading banks seek to recoup charges
Lloyds TSB leads the way to lower charges Lloyds TSB is the first of the High Street banks to announce that it will be reducing its charges fo...OFT brings test case on overdraft charges The Office of Fair Trading (OFT) has forged an agreement with a number of UK banks, including HSBC, ...
Revised overdraft charges may muddy waters In recent weeks, leading High Street banks have been revising their fees for unauthorised overdrafts...
Debt forum threatens legal action on IVA charges The Debt Resolution Forum (DRF), which exists to represent advisors and companies within the debt ma...
HSBC pays back £16 million in unfair charges HSBC has put itself in the spotlight by becoming the first UK bank to reveal the cost of refunding c...No Comments »
No comments yet.Leave a comment
Previous: « Treasury closes in on dormant accounts
Next: Credit funds 13% of gamblers »
Visited 38 times, 1 so far today since July 12th 2007