I’ve been charged £119 for a £17.79 overdraft
G.S. writes: I wish I had been smart enough to bank at Lloyds, like the reader whose letter you published recently. Unfortunately, I bank (or used to bank) at Santander, with a 123 account. Over the Christmas period I slipped up and forgot to add funds to my account to cover my TV licence direct debit. I went into overdraft by £17.79 and I have been charged £119 for the privilege. By my reckoning, Lloyds would have charged me about 50p. Some difference. LLOYDS Bank now charges 1p per day for every £7 of an overdraft. Santander’s charges are based on a flat fee of £6 per day. Santander told me: ‘The customer was in an unarranged overdraft from December 1 to January 8 – a total of 39 days. Our unarranged overdraft fees were charged at £6 per day and capped at £95 for the month. But as Mr S went into a second month further fees were applied.’
Ten days ago Santander announced that in July it will remove or reduce unarranged overdraft fees. Also it now issues free text and email alerts when an account goes into the red without prior agreement.
It appears the big banks are moving before they are forced to do so. Last year, the Financial Conduct Authority carried out research into overdraft fees. It described charges as a ‘key area of concern’. Last Wednesday, it issued a statement saying it ‘remains concerned’. So worried that it is going to publish a ‘strategic review’ later this year.
Gareth Shaw of consumer body Which? said: ‘It is unacceptable the Financial Conduct Authority is still dragging its feet on unarranged overdraft fees while consumers continue to be hit by these unacceptable fees.’
I could not have put it better myself.
There is good news for you. Last week, Santander said: ‘As Mr S has not been in this position before, we have refunded the full £119 as a gesture of goodwill.’