Bank charges row 'far from over'

09/09/2009

The "surprise" move by the Royal Bank of Scotland (RBS) and NatWest to slash fees for unauthorised overdrafts does not signal the end of the row over bank charges because many consumers still face over-complicated and unclear fees, an expert has said.

According to Andrew Hagger of financial comparison service Moneynet.co.uk, the issue of bank charges will not go away because different banks have "completely different charging structures".

RBS and NatWest announced earlier this week that from October 1st, the penalty charge for going overdrawn without permission will be cut from £35 a day to £15, while the fee for a bounced cheque or debit payment will fall from £38 to £5.

Mr Hagger said the case of RBS and NatWest illustrates how complicated bank charges can be, as these two lenders alone adjusted five different sorts of fees, so it can be "quite difficult for customers to know how much they may be charged".

"Bank charges need to be clarified and become more transparent," he added.

According to figures from the Financial Services Authority, consumer complaints about overcharging and poor customer service rose by 259 per cent between the second half of 2006 and the first half of 2007.

EuroDebt director Kevin Still said: "The number of complaints relating to bank overcharging in the second half of 2008, at over 180,000, is a reflection of the problem. Once people fall into financial difficulty then they seem to get hit from all sides and the charges can trigger further problems.

"One of EuroDebt's early goals as a Debt Management Company is to try and freeze interest and charges on the accounts we are authorised to act upon.

"We now offer a prepaid current account that is available to all UK residents without the requirement for a credit check. There is a flat monthly fee of £12.50 and no charges for failed direct debits or standing orders.

"It is our experience that people struggling with debts are routinely being hit with charges of over £40 per month."

Tags; Debt Management and Banking, Young Family Finances, Credit Card Lifestyle,

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