Have you ever had to pay overdraft charges? Not only can they be unexpected and unwanted, they are also on the rise, with rates reaching record highs. Now it’s time to talk back and get even.
We all know that feeling – it’s coming to the end of the month, you won’t be paid for a few more days and you’ve got to make your money stretch.
With regular payments and direct debits coming out of your account, it’s easy to exceed your overdraft limit – and face a hefty charge at the same time.
Changes don’t go far enough
Charges for unauthorised overdraft charges are still an issue for many consumers. Some banks, such as RBS/Natwest, have made changes to how they charge customers. But, as our Money Editor James Daley said in a recent Conversation, ‘there’s definitely still room for improvement.’
If today’s figures, released by the Bank of England, are anything to go by, this is some thing of an understatement. They revealed that rates for authorised overdrafts reached a record of 19.09 per cent in October, meaning the typical customer who goes overdrawn is paying 38 times higher than the base rate of 0.5%.
This is what our banking expert Rebecca Fearnley has to say:
‘In spite of recent changes, unauthorised overdraft charges remain complex and are difficult to compare. On the whole they are still too high and we think they are disproportionate to the cost to the bank of providing the overdraft service. If you think you might be about to go into the red, it makes sense to arrange an overdraft with your bank before it happens and avoid any unnecessarily high charges.’
Join our campaign for fairer charges
Thankfully, we’re not the only ones to be concerned. The government is now calling for evidence on a wide range of credit and consumer issues – one of which is unauthorised overdraft charges.
Of course, we’re writing to the government urging them to end unfair bank charges, but it’s input from real consumers that makes a stronger case.
If you’ve ever been affected by overdraft charges, now’s the time to get even and email the government directly about your experiences. We know from experience that this approach works – in the past, your emails to MPs about confusing energy bills and tariffs helped to make sure that Ofgem’s proposals were tough enough.
But don’t just tell them – tell us too. We all have our own horror stories of grossly unfair charges and unhelpful banks. Armed with your stories we have a better chance of persuading the government to take action.
The government stated firmly in its Coalition agreement that it would ‘introduce stronger consumer protections, including measures to end unfair bank and financial transaction charges’. With your help, we can make sure it sticks to this pledge.