Consumers split over payment blocking idea

Consumers are split over whether it would be better to have a system in current accounts where any payment that would take an overdraft beyond its limit should be blocked.

A poll by consumer group Which? conducted in the wake of the Supreme Court judgement on bank charges found that 46 per cent believed such an arrangement would be a good idea, while 38 per cent argued it is better to have payments go through and incur the resulting penalties.

Those aged 16-24 were more in favour of the blocking arrangement, with 64 per cent for this, while the idea was supported by 66 per cent of those who have unsuccessfully tried to reclaim bank charges.

Which? personal finance campaigner Phil Jones said the fact that banks can allow overdrafts to exceed their limit can cause debt management problems for some.

He added: “We want banks to show they’re willing to respond to what their customers want by only making unauthorised overdrafts available to those who ask for them.”

The poll was held after the Supreme Court decided that the Office of Fair Trading’s remit to judge the ‘value for money’ of consumer contracts did not extend to penalty charges.

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