Millions of customers set to be impacted as Santander announce overdraft fee reform
Huge numbers of customers of Santander will be affected this summer after the bank revealed that they have reformed their overdraft fees as part of their revamp of their current account rage.
The Spanish-owned organisation identified that they have discarded the cap on authorised overdraft fees and have raised the borrowing charge for people who got into unauthorised overdrafts, in a move that will benefit some and damage others who are less adept at managing their money securely.
The decision to raise some fees and remove others at the same time was made this week, with it expected to be officially introduced into the bankís policy by August 19th.
Those who will be adversely affected are people who tend to go into their overdraft without the Bankís consent, an occurrence which often happens when direct debit schemes and other fixed date payments are taken out of accounts with a lack of sufficient funds in them. For people such as these, the ìusage feeî for going into an unauthorised overdraft has risen to £6 a day, up from its previous value of £5.
This charge will be applicable to individuals who have a Santander 123 Current Account, and their Premier, Everyday and Premier Direct ranges.
Moreover, the caps on the amount that can be charged for going into both an authorised and unauthorised overdraft have been removed. Previously, a cap of £20 a month was placed on the amount that the bank could charge as a ëusage feeí for going into an authorised overdraft in all the aforementioned accounts. The £1 a day fee will remain, but the cap on the number of days that will be charged has been lifted, meaning someone who utilises their authorised overdraft for 25 days each month would be required to make a payment of £25, compared to the £20 that they are obligated to do at present.
Similarly, the existing £100 monthly cap on unauthorised overdraft usage fees has been removed, meaning that customers who inadvertently go into their overdraft could find themselves facing a £6 fee each day until the issue is addressed.
However, the majority of account holders at Santander will welcome the news that unpaid transaction charges are set to be slashed to zero from its current value of £5 and £10 on the 123 current account, and to just £10 from £25 on the banks other products.
Santander has identified that they are currently in the processing of writing and sending out letters to all their customers, so that the policy change and its knock-on effects are clearly explained for the future.
It added that it was reforming its current system "following recent competitor moves", saying: "We are writing to customers, providing at least 60 days' notice, so that they are able to understand how they may be affected by the changes."
Monthly overdraft charge caps have stayed the same at £95 for 123 current account holdersí, and a slightly higher £150 each month for Everyday, Premier and Premier Direct account holders.
Reza Attar-Zadeh, head of UK retail products at Santander, said: "We provide a range of services to help our customers manage their money more closely. These include online and mobile banking, email and text alerts which can be set to warn of an overdraft or unpaid item, a £12 overdraft buffer, a grace period of until 4pm to clear an overdrawn balance, and 22 days' notice of account charges."