Current account overdraft fees to be investigated

When looking for a current account to suit your needs it is important to check how much you will be charged for going overdrawn without permission.

In April 2006, the Office of Fair Trading (OFT) found that default charges for credit cards had been “set at a significantly higher level than was considered fair” and that these levels were also likely to apply to current accounts.

After the OFT investigation, a payment threshold of £12 was set unless there are exceptional business factors ñ and current accounts are next on the list for the OFT.

“The reduction of default charges on credit cards is great news for consumers,” said OFT chief executive John Fingleton.

“We are now extending that work to inform ourselves about account default charges.”

Meanwhile, Lloyds TSB has changed its rules regarding overdraft fees and is to levy a £135 charge if an account holder slips into the red, the Times reported this week.

Currently, the bank will waiver the standard fee of £30 if the customer has not gone more than £10 overdrawn in the past 12 months. But from November 1st, anyone who spends one penny over their limit will be charged £30 and this fee can be charged up to three times in one month.

© Adfero Ltd

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