/ 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?

Kara says:
9 January 2013

I lost my Job in June 2012 my partner had also lost his job in April 2012 I straight away made an appointment with my bank HSBC and informed them of my situation as my Mortgage was also with them they agreed to up my over draft but I had to pay £50 to do it I also have a loan of £139 a month with this bank to pay off a car I had bought before I lost my job…. I got a Temp job in August 2012 which was much lower pay & I was struggling to pay all the bills so I called everyone I paid a direct debit to and asked them for help explaining my situation alot were helpful lowering my charges as much as they could but during this time my bank HSBC were still charging me interest & a £25 charge everytime I went over the agreed over draft limit even if it was a few pounds which spirelled me more into debt I rang up the bank explaining I was struggling even though myself & partner now had a Temp job now bare in mind I have been with HSBC since I was 16yrs old now 32yrs old and never missed a payment or gone into debt until now…. the person on the end of the phone put me through to a financial advisor who to put it in a nice term did bugger all and explained we cannot help you there is more money going out than coming in you are bank rupt I was in tears i explained it’s not like I havn’t tried I called everyone up and why can’t they give me a freeze on the mortgage or extend my loan term so I can have a break as they were with this bank they refused to help I said I wanted to leave and would never use HSBC again the guy replied well you can’t until you are in the black which is unlikely…. I am still struggling as still not got a perm job and they are still charging me fees when I can I will be leaving HSBC I was loyal to them for many years and they did nothing to help a honest person who has never been in debt or have any store or credit cards I am disgusted the way I have & still am being treated & don’t know what to do ???

elly, says:
14 January 2013


patricia says:
31 January 2013

Kara, I understand completely what you’re going through with HSBC.
My husband and I were also long term customers with them,and have been treated very badly, very similar to your story.
The latest incident was refusing to allow my husband a temporary overdraft in his business account.
They kept offering a business loan as the only solution,which has tied him for years.
In 2009 my husband suffered a heart attack, mainly through the stress we’ve had with dealing with this bank. I approached my local branch and explained that as he was recuperating for 4 months,he would not be able to make any payment on this loan. The person I spoke to was very sympathetic and arranged for a suspension until the date given that my husband would return to work.
However, a week after, and almost every day after my visit to the bank, we were bombarded with calls- including Sundays, bank holidays, daytime,night time, the lot.
I spent so much time explaining the situation- only to be treated with a cold reply such as ‘Get used to it-these calls will not stop until payments are resumed’ etc. Futhermore,they would proceed to take payment which would obviously bounce,then slap charges on the account.
None of this treatment was conducive tp my husbands recovery,and he suffered another attack.
We ended up having to re-strusture the loan repayments,(another 10 years to go!).
I hate this bank-they have been like the darkest cloud over our heads for 6 years.

I think a lot of these stories are blow out of proporation somewhat. I know for a fact that HSBC will never charge you until you gor over your overdraft by less than £10. You will then be charged £10 if you exceed it up to £25, and then £25 per transaction for anything over. These are clearly stated in the terms and conditions and not hidden in any way shape or form. You would have also been given a letter when you first applied for your overdraft with the terms included…not even in small print! This money that you are not authorised to borrow has to come from somewhere…it’s not just a number we conjure up on the screen.

I think what people are forgetting and failing to grasp is that at the end of the day…a Bank is a BUSINESS. It needs to make money to function. And please hold back on the ‘oh you make enough money as it is with your hige bonuses’…I’m sure Argos make enough profit but I highly doubt if you were to walk in a shop they would hand out free stuff becuase you’ve ‘been a customer for 10 years’.

We are very lucky to have free banking in the UK…try finding a facility in Australia or the US that your not going to pay for every month and every time you make an ATM withdrawal.

People need to take a step back and take control of their finances. Out of all these stories above, how many of you went in to the Bank BEFORE you knew you would go overdrawn…very very few if any. Forward thinking and planning could save all of this.

David Alex Mates says:
20 February 2013

I was charged £35 by Santander for going over my £100 arranged overdraft, the reason that my account went over……. the charges for using the overdraft facility from the previous month.. This is the practice of the mafia, can anyone advise me on if this is legal… it is certainly immoral as they conducted the transaction not I.

Jamie says:
5 March 2013

Hi there, so I recently requested an overdraft and was refused because of my finances. The bank has now let me go £104 overdrawn to pay a bill I thought had been paid, they charged me £35 and are now charging me £6 a day till I pay back. I only get paid every 4 weeks and have another 2 till I get my wages, I am worried by this time I will have no wages left and the rest of my bills will not be paid leaving me worse off again. Any help or advice what to do?? Thanks for your time

dawn says:
10 March 2013

my boyfriend over drew on his account by £200 3 yrs back he has been getting bank charged £80-£100 a month ever since & yet he wont go bank & sort it out just shrugs it off,is that fair?

Paul says:
22 April 2013

Just move to New Zealand, where banking is miles ahead of what it is in the UK and you don’t have to deal with all of this.

martin says:
17 July 2013

WTF Santander???? They allowed me to make a card payment of £8 which put me overdrawn! for which they have charged me £25, they then put a £100 un-arranged overdraft charge onto my account so now we are at £125 of charges for them allowing a payment through!!!! as i have no overdraft with them i think this is just pure money grabbing on their behalf… i will be going into branch tomorrow to close my account with them whether or not they cancel the charges

K.Mason says:
4 February 2014

I object to Nat West charging £10 a month in addition to interest on arranged overdrafts. If only a small amount is outstanding this charge could be equivalent to several hundreds % p.a.

Sam says:
20 June 2014

Hi there

A few years ago my boyfriend opened a bank account with an arranged overdraft of £1800 which the bank said he would never be charged any interest for – this was when he became a student at university. When we moved in together we decided that all the money coming in should go into my account as all the bill came out of it. However, now his bank have started charging 10% interest on his £1800 overdraft every month, we didn’t realise this was happening until we recieved a letter from the bank saying that he had gone over his limit and was being charged £6 a day, capping out at £60 a month, which is a lot of money for us at the moment. This has gone on for 4 months now, is there anything we can do to get this money back?

Thank you


Ady777 says:
4 July 2014

Can one still claim overdraft charges back? As my husband and I did not claim ours before the banks changed their charging system

texasdave says:
16 July 2014

Hi, i went into my emergency overdraft with barclays for about 2 years getting charged £22 a week is there any way off getting this back pleaese

Cassy says:
19 July 2014

In 2010 my bank went 65 overdrawn I then had to wait 6 weeks before I received any I come by the time I did I owed the bank over a 100 which I couldn’t afford a few months later my fees stood at over 300 pound I attempted 5 times to pay back as soon as I missed a payment more fees were added on, to make it worse only a percentage of what I was paying was actually going on the debt the rest the bank were taking for further fees and management , now four years later my debt stands at 1,165,.12 I have spoke to the bank and they deducted 300 but claim they done nothing wrong, I have paid back hundreds but because everytime I miss payment more fees get added the money I paid has just been taken and debt has increased x

The bank are not allowed to charge you, if it is another bank charge that put you overdrawn. As far as I’m aware!

Cassy says:
19 July 2014

I never had an overdraft either they called it an unplanned overdraft when I asked for this not to be used and simply charge be for the bounce if money was not in there they said this was not possible.

Charles Clapp says:
2 September 2014

Barclays have changed my overdraft charges and the amount it is charged on! whereas I used to pay about £13pm in interest I am now being charged £43 per month and as I am a pensioner on a fixed income and alreadt finding it difficult with constantly rising prices an extra £30pm (or £180pa is making me sick with worry about how I will manage!

I opened an account with Natwest, the conditions were that as long as I paid in £1000+ per calendar month the account was free, if I paid in under £1000 then the account would cost me £20 per calendar month, this was because of the account benifits like free travel insurance etc! A week after opening the account, and before I ever paid in or took out a penny, I decided to downgrade to the normal current account, which cost nothing and did not have any conditions of how much I had to pay in. I went in to my local branch, and asked the cashier to do this for me. Once the cashier told me this had been done I left. I then didn’t ever use the account, as I stayed with my current bank.

So two years later I decided to pay a cheque in to the account, an account that had never had a penny deposited, nor a penny withdrawn.

To my supprise when I went in to the branch to draw on the cheque, the account had swallowed the £900, and apparently was still over £2000 overdrawn.

I asked the bank to explain how this could happen on an account that had never been used??

The anwser was “bank charges”!!!

Apparently the cashier I had previously asked to downgrade the account had not done this!

So for the first month I was charged the £20 for not paying in over £1000, that then put me overdrawn, another charge, and so on and so on, within 2 years I was £3000+ overdrawn, on an account I had never used!

I argued the point with the bank, but they said they had no record of me ever downgrading the account and would not budge!

I went to the financial ombudsman with my case, and ended up having the bank agree to remove all charges, and credit the account back with a £900 balance!

I have been with them ever since, and have never paid another bank charge!

I have a mobile app and watch my account like a hawk, checking it daily!

Taegan Vickers says:
14 November 2014

Hi I have also had a great deal of issues in regards to charges for my Advantage Gold account with Natwest and have only in the last week been informed I can make a claim to have unfair charges refunded from the last 6 years and how to go about doing so without requiring to pay someone to do it for me. It transpires that in total since 2009 I am able to make a claim for the grand total of £2562.70 of unarranged over draft fees! These have occurred as a result of NatWest refusing to take the charges when there are funds available in my account but only when there are not therefore making me unable to catch up. Some of the charges have been as high as £120 for ONE month! I pay £180 a year for my account and I honestly don’t see the ‘Advantage’ in it!! Wish me luck in my quest to get my money back 🙂 x

Kev Hewings says:
19 December 2014

I have recently been sent a letter from Barclays bank telling me I owe them £253. I had a mortgage with a building society(an account only used for my mortgage and haven’t used since) I was told that when I sold my house in 2002, although I thought the balance of the mortgage wa paid off, but it appears there was a small sum of money outstanding on the account (£10 – £15), Barclays took over the building society in 2005. This account has been accruing interest since, this is the first time I knew anything about it. Do I have to pay this, can I appeal.

My daughter is with Lloyd’s,T.S.B.over about 4 years they took over £16000 in over draft fees,cut along story short,she went to the ombudsman,because the payments were making it hard for her to make ends meet,she had to sell her jewellery,and other items,even borrowing off me,and also getting a loan,anyway she got turned down by the ombudsman.She doesn’t think this was fair,neither do I,is there any thing else she can do.

I am sure this is quite a complicated story. However, spending £16000 in charges over 4 years to service an overdraft seems on the face of it, unless the overdraft was very large, to have finances out of control. If the overdraft was authorised the charges to be made should have been explained at the outset.

To put the charge in perspective a typical good customer of Lloyds might currently expect to get a loan of £14500 with repayments spread over 4 years of around £400/month, total repayment £16000.