Banks Earn £3bn a Year from Overdrafts
Customers are being charged 3bn a year for unauthorised overdrafts according to a report by Which magazine
3rd September 2004
A report by consumer magazine Which suggests that banks are charging their customers a total of £3bn a year for being in the red without an authorised overdraft.
The magazine describes the interest rates charged as 'exorbitant' - with some banks charging up to 33% - and has called for a 'grace period' of a few days before customers are charged, saying that most of the charges are made on small, accidental overdrafts rather than deliberate borrowing.
The banks counter that getting an authorised overdraft is easy and cheap, and their charges reflect the extra costs of running an account that's overdrawn.
Read More: BBC Report, Which Magazine
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