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?