/ Money

What charges are lurking behind your bank account?

We think the concept of ‘free’ banking in the UK is a myth as we’re often stung with charges we’re not expecting. Hidden, unfair or excessive, the banks can have a  habit of sneaking in additional costs.

When my student days came to an end it took me several months to find a permanent job. I had temporary work which kept me going, but without a regular income I ended up being hit with regular bank charges.

My bank gave me a small emergency overdraft to use, but due to my irregular income, I ended up staying in the overdraft for nearly a year. I was being charged £22 every five days I was using the facility. And when I exceeded the limit I would be hit with an £8 charge for each transaction. Often it was the £22 fee that caused me to exceed the limit. Naturally the situation soon spiralled out of control and I ended up several hundred pounds in debt.

Charges for bank admin tasks

And I know I’m not alone. My colleagues have been sharing their experiences with me. Jennifer Davis told me:

‘Mine and my partner’s joint bank account went over the agreed overdraft by approx £13 and we were charged £50 for it. As soon as we noticed (two days later) we put more money in the account – it was just an accident. I was shocked by the charges and they wouldn’t let us off.’

And Judi was charged a fee for amending her direct debits to keep her out of her overdraft:

‘My current bank account (which I have had for 35 years) was going overdrawn every month by a large amount because my salary was going in after my largest payments had gone out. I asked my bank to change the date of the outgoing payment. They made the change but charged me £120 directly out of my account to do it – a lot of money for a small admin task!’

Handy banking texts notify me

I soon took my business elsewhere, and the bank I am with now automatically apply a £6 buffer in the event of overdrafts being exceeded. As long as I do not exceed the extra £6, I am never charged, and if I do, I am only charged £6 per day (and I receive a text to notify me I have gone over). This has only happened once, but overall I feel much more satisfied that this bank is charging me fairly and doing their bit to ensure I don’t get stung.

Here at Which? we often hear about unfair and hidden banking charges. I’m creating a dossier on unfair charges so we’ve a record to present to politicians. We want to ensure discussions relating to the Financial Services Bill stay on track so we end up with a financial watchdog we can count on to ensure we’re being treated fairly.

In order to show the decision makers that unfair bank charges are an issue, I am looking to get more testimonies to add to our dossier. Have you got an example you’d be happy to share?

lucian says:
17 April 2015

never again hsbc worst bank ever. I had a bank account with them 4 years but decided to break the contract, had massive argument with their financial advisor because i couldn t understand a simple fact : how in the world am I being charged 220 £ for a 80 £ overdraft when I have asked for an overdraft and was refused. So I m asking the dude ”is it possible to have an overdraft to my advance account?” ..NO!! bad credit bla bla i said ok so pls stop any over orders when the balance reaches 0. No! we cant do that informal debits bls bls. So in my head the bank is working with my money and ebb elses so we should be their priority. In other words i grew up to understand that banks usually live and prey on the 20% that cant pay their debts or stupid enormous charges on others. conclusion all banks should die. Cash only 4 ever

Rachel says:
2 March 2016

The overdraft fees are the only thing keeping me in there. Last month they let me off and have me a refund but it took five days to issue so I still got charged this month because of those five days. This all started because I went fifteen pounds over, and the charges have snowballed all year. I’m a single mum on a low income, and I’m now struggling to pay bills because my account is so far in the red. How am I supposed to feed us? Or pay for petrol to get to work? I’m considering being paid in cash, but without the income my back account will get me into real trouble. I was paid on Friday, already I have nothing in my account and today the bank whacked on £200 in charges. That’s me starving for the rest of the month.