Stay in credit – or find a new account

K.J. writes: I am writing following your coverage of Santander’s excessive overdraft charges. My daughter was charged £199 for an inadvertent debt of £23, made up entirely of bank charges. Santander failed to communicate with her for more than three months, ignoring its own banking covenant. By my calculation, the result is interest at 845 per cent for a four-day overdraft. This is hardly a reasonable way to deal with a 21-year-old probationary teacher to whom Santander had offered an unsolicited £2,000 free overdraft just weeks earlier. THIS is not quite as clear cut as it seems. Santander has confirmed your daughter had £11 in her account but made two card payments that meant she was overdrawn by £23. Four days later she deposited enough to put her account back into credit.

But she has an Everyday Current Account and the rules state that if you help yourself to an overdraft you will be charged £6 a day.

So there was already a £24 charge in the pipeline because of the four days she was in the red.

These charges meant your daughter was overdrawn again. As she made no fresh deposits, there were new overdraft fees of £60 for one month and £95 the next month.

I hoped to have a helpful word with Santander as the bank did cancel the £119 overdraft charge for the reader whose letter we published recently.

Unfortunately, this proved impossible when Santander revealed that your daughter had been in the same situation twice before.

It had already cancelled charges of £95 and £18 and had explained exactly how she could avoid a recurrence.

In July, Santander plans to cap unarranged overdraft charges on the Everyday account at £50 a month which is better but still far from ideal.

Your daughter was offered a 123 Graduate account which includes a free overdraft of up to £2,000. She turned this down – but I would urge her to think again. If she cannot keep her account in credit, at least she could sidestep daily fees of £6.