RBS cuts unauthorised overdraft charges
by Gill Montia
Story link: RBS cuts unauthorised overdraft charges
The majority state-owned Royal Bank of Scotland and its NatWest subsidiary are cutting unauthorised overdraft charges.
According to a BBC report, from 1st October, customers whose cheques bounce will pay £5 for each offence, as opposed to the current levy of £38.
At the same time, the cost incurred for payments made on an overdrawn account will fall from £30 to £15.
News of the RBS turnaround has been greeted enthusiastically by consumer groups, with Legal Beagles spokesman, Nick Spooner, expecting other banks to “follow suit quite quickly”, the BBC reports.
The Office of Fair Trading (OFT) has been trying to establish the legality of the charges – widely regarded as exorbitant – under the 1999 Unfair Terms in Consumer Contracts Regulations.
In 2008, a High Court test case that has now been running for two years ruled that the OFT had the right to decide whether or not the charges were fair.
However, the seven High Street banks involved in the case challenged the ruling and in April were granted the right to appeal to the House of Lords.
Matters will eventually be settled by the new Supreme Court, which takes over the appeal function of the House of Lords at the start of the legal year, in October.
In the meantime, around 1.2 million individuals and businesses have had their complaints over unauthorised overdraft charges frozen under a waiver granted to the banks by the Financial Services Authority.
The charges are estimated to provide UK banks with a combined annual income of £2 billion.
Add to Bookmarks:
Related stories to: RBS cuts unauthorised overdraft charges
Halifax cuts overdraft fees with Reward current account ...
Barclays cuts unauthorised overdraft fees ...
FSA extends waiver on unauthorised overdraft charges ...
High Court considers historical overdraft charges ...
OFT brings test case on overdraft charges ...
1 Comment »Previous: « EHRC reveals women receive 80% less in bonuses
Next: HSBC and Nationwide safest institutions in the UK »
Visited 1046 times, 1 so far today
I have had these extreme charges many times ive had to pay £38 to natwest because my phone company ignored my requests when i asked them not to ask for money from my bank, as it only helps the banks and no one else. my phone bill was less than £38
but yet many times i have had to pay this extortionate rate. it is robbery, and i am only on benefits. but not that this matters to the bank. I found myself many times, inbetween the phone company and the bank. both blameing each other. and refussing to stop the direct debit. i was left with no options many times but to pay these charges. because they wouldnt stop the direct debit.for a week. its criminal. how have they got away with it for so long,
i feel that they should pay the customers these charges back. i would like the money back. isnt it true if you rob someone. you usually have to give back what has been robbed, or pay compensation. i feel that the banks owe me some of those charges back.
Comment by paul — October 22, 2009 @ 1:27 pm