Are overdraft penalties wrong?
Bank charges are often the topic of debate for many public interest groups. In fact so much pressure has been applied to banks with regards to unjust fees that many have been forced to refund their customers, costing literally millions in back payments. However, new research has revealed that many customers are still being charged ridiculous fees, as a penalty for exceeding overdraft limits.
According to the analysis, the average offender is being charged almost double the amount that the limit was exceeded. There are often very valid reasons for people going overdrawn on their account, the most common of which being due to a slight financial oversight. For those who have made a minor error with regards to their financial planning, this type of fee can leave a very bitter taste in ones mouth.
On the other side of the coin are those people who are genuinely struggling to make ends meet. For people who are already in a difficult financial situation the fees can come as a heavy blow, making what is already a bad situation, considerably worse. Consumer groups argue that this type of charging, to this particular brand of customer is unethical and irresponsible.
The study was complied using comparative data from 7 major banking institutions. The worst offenders were discovered to be charging in excess of £100 for exceeding their threshold by £70. There are very few valid reasons any bank can use in order to justify such actions. However, it is accepted that banks do need to impose boundaries of some form, as a means to deter regular offenders. Unfortunately, the system that is currently in use is quite obviously designed to be more than just a safeguard to protect the banks own interests.
The best advice for any consumer, is to make sure you are aware of your banks procedures with regards to going overdrawn and to also ensure you are constantly aware of your account status as a means to avoid fee’s, if you do beyond your threshold.
