Money Blog: Will the Bank Charges Court Case Make Any Difference?
You & Your Money
Best Buys
Tools
Sky News
Home » Money Blog » Money Matters » Will the Bank Charges Court Case Make Any Difference?
Will the Bank Charges Court Case Make Any Difference?
By Nic Cicutti
Jul 8, 04:16 PM
Here’s a confession: I’m probably one of the few people left in the UK who hasn’t bothered to make a claim for repayment of unfair bank charges.
It’s not because I’m a saint when it comes to unauthorised overdrafts. From time to time, usually once every year or so I manage to go over my limit, usually when it comes to holidays or other “big ticket” spending, when effective management of my finances tends to get a bit shaky.
However, I’ve usually been reasonably successful at blagging my way around the problem, with the result that about half the time my charges have been waived.
In turn, it means that if I were to claim back what I’m “owed” over the past six years the total amount of compensation from my two current accounts would probably stretch to little more than a couple of hundred quid at the very most.
To be honest, life’s a bit too short to spend hours writing letters to my banks about that kind of money, especially as a quick call usually sorts the problem out.
Of course, if you are among those whose charges have run into many hundreds, sometimes thousands of pounds, it’s a totally different story altogether.
Mind you, what is noticeable is the way that banks are beginning to work round the “problem” of charges for unauthorised overdrafts in the light of the current legal action they face at the hands of the Office of Fair Trading (OFT).
A few weeks ago, Barclays slashed its overdraft charges to just £8. The bank said this had nothing to do with the continuing litigation with the OFT. It has simply responded to its customers’ needs. Yeah, right.
Even so, this is not quite the concession some may think: if you go overdrawn once a month you will now have to pay £22 for using a new “personal reserve”. Until now, the charge would have been £30 or £35 a pop, depending on whether the cheque was paid or bounced. If you get lots of cheques bounced in one day you may end up paying £40 instead of £35.
In fact, I had a similar experience myself only a few weeks ago with my First Direct account, which went over my agreed overdraft limit to the tune of £250. I was on holiday in Sweden and had been forced to use my debit card after a separate credit card from another issuer was refused by various vending machines.
So I was dreading the bank’s letter telling me that I would pay £XYZ in unauthorised overdraft charges. In fact, I received a letter telling me that I was being charged a £25 “arrangement fee” for a further – temporary – extension to my overdraft facility.
Bizarrely, my first reaction was one of relief: no overdraft fee to pay! None of that “naughty-boy-smacked-hand!” routine you normally get when you go over your limit.
It was only afterwards that it dawned on me how, bar the fact that I’m now paying £10 less, maybe, than before for the same offence, they’re still taking a big wodge out of my account for being overdrawn.
Still, at least they’re calling it something different now and that’s what really matters, isn’t it?
User Comments
Janet 16 September 2008, 21:07
You already have to pay for an agreed overdraft limit and now they have the cheek to charge extra on top if you go over your reserve. How can they continue to be allowed to get away with it?
Brian Coaker 15 July 2008, 06:35
Nick are you a expert in money matters ,reading your article makes me realise just how good I am at getting through life without paying overdraft fees,or for that matter a overdraft,get a grip Nick ,as I have got older the great deals and the bargains that seem to be on offer from all sorts areas of life have become much easier to see through because they are now so dumbed down just like the quiz qustions on the TV that anybody with a slight grasp of reality can see the CATCH.
Most Popular Talking Points
- Is the Alliance and Leicester takeover bad news for consumers?
- Should We Support The Fuel Protests?
- PPI: The Rip-Off That Benefits You
