Lloyds cuts overdraft fees & rates

Sean Gardner, Chief Executive of MoneyExpert.com, said:

"Lloyds TSB is leading the way on cutting overdraft fees and rates as banks start responding to customer anger over charges. It’s refreshing that the bank is listening to customers.

"Its response which includes slashing the rates charged on unauthorised overdrafts and giving customers advance warning ahead of going into the red without permission are genuine steps forward. Its introduction of a grace period until 3.30pm to sort out problems is also good

"However it doesn’t deserve the full three cheers – it’s more a case of two cheers as the charging structure is still not that clear and the text alert service is going to cost £30 a year once the free trial is over.

"The genuinely good news is that interest rates on unauthorised overdrafts are being cut from 29.8 per cent to the same rate for authorised overdrafts. Lloyds had one of the higher interest rates for unauthorised overdrafts and is now well below average. Cutting the fee for returned items from £35 to £20 is also good news.

"The text messaging service is worth trying while it’s free but it then costs £2.50 a month and becomes less worthwhile.

"And the new charges from November 2nd which include a £15 monthly fee for going into the red without permission plus daily charges of £6 to £20 will still be expensive. However if they are made clear to customers then at least people will know what they are getting into."

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