Which? calls for action on 'confusing' overdraft charges

Tuesday, 17 January 2012 12:00

Consumer action group Which? has called upon the Financial Conduct Authority (FCA) to take action over what it says are confusing charges for customers who go into unauthorised overdrafts.

Its researchers asked several members of the public to work out how much it would cost to go overdrawn with various banks using a dummy statement and information from the financial services providers themselves.

Not one was able to get all the calculations right, with a score of seven out of 48 between them.

Which? said this is because each list of overdraft rules is complicated and subject to extra fees, criticising some banks in particular.

Lloyds TSB was highlighted has having especially confusing fees, while Nationwide charged five times more than Halifax when customers made one payment from an account that had been overdrawn for two days.

First Direct and HSBC had the highest unauthorised overdraft fees for current accounts.

Urging the FCA to be a watchdog not a lapdog, Which? said it should hold banks accountable for unfair overdraft charges and force them to bring in clear charging structures.

Chief executive Peter Vicary-Smith said: "While the government has previously announced reforms to tackle unfair overdraft charges, they simply don't go far enough. It's extremely disappointing to find that bank charges are still too high, too complex and impossible to compare."

In response, the British Bankers Association insisted banks all have clear charging scenarios on their websites and suggested customers who want to avoid them should keep their accounts in credit or ask for an increased overdraft facility.

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