Overdrafts? More confusing than Ted Rogers' 321 questions
Overdrafts are a nightmare. Once you get into the red, there's almost no way of working out how much it'll cost you. With that, consumer group Which?!?! have decided to put that line of thinking to the test and asked a group of volunteers – which included a maths PHD student – to calculate the charges of an unauthorised overdraft for four separate banks.
The research showed that only 7 out of 48 charges were correctly calculated.
Which!!!! chief executive, Peter Vicary-Smith, said: “Bank charges are too complex and impossible to compare.” It seems that overdrafts have a number of complex rules and additional fees, with Lloyds TSB coming in for particular criticism.
In simple terms, this could mean that you end up paying five times as much for going into the red than necessary. For example, going overdrawn for two days in a row would be charged £50 at the Nationwide building society, while the Halifax would charge just £10 for the same mistake. The highest current account unauthorised overdraft fee is £150 a month, thanks to First Direct and HSBC.
“Bank charges are still too high,” said Mr Vicary-Smith. “The regulator must be a strong, open and proactive watchdog that stands up to the banks, not a lapdog.