Unauthorised overdraft charges continue to rise

by Gill Montia

Story link: Unauthorised overdraft charges continue to rise

MoneyExpert.com is convinced that consumers who exceed their agreed overdraft limits are paying more in charges than a year ago.

According to the financial website’s research, the average bank customer can expect to pay an additional £5 in charges for every transaction that puts their account in the red or keep it there.

The rise represents a 22% increase on the typical cost in November 2007, which amounted to £25 for such transactions.

The outcome of the High Court case brought by the Office of Fair Trading (OFT) to establish the legality of such charges could still be months away.

In October, the seven High Street banks involved in the case began an appeal against a ruling that the OFT has the right to decide whether or not the charges are fair.

The ruling allowed the OFT to assess the terms and conditions that govern the charges under the 1999 Unfair Terms in Consumer Contracts Regulations.

In the meantime, the banks seem to be relentless in their demands for hefty penalties for unauthorised withdrawals and bounced cheques.

MoneyExpert.com director, Sean Gardner, warns that the cost of borrowing is increasing across the board and those living in their overdraft need to be aware that in the majority of cases they will pay a premium for this cash.