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Following its investigation into the capping of credit card penalty fees, the
OFT is to look at overdraft charges.
The OFT recently ordered credit card issuers to limit their penalty charges to
£12, a move that forced many to cut their existing charge rate by more than
half. Now, in response to a barrage of customer complaints, the OFT is
reportedly ready to impose the same conditions on overdraft penalty charges.
Most banks charge customers if they exceed their agreed overdraft limit. Some
charge one set fee, while others charge cumulative penalties depending on the
number of days an account holder is beyond their limit.
Many consumers argue that the fees are unfair, disproportionate and in some
cases illegal.
While many banks will charge £20 to £30 in penalty fees, campaigners argue the
cost to the banks to administer overdrawn accounts amounts to mere pennies.
It is believed that the OFT will instigate an investigation into overdraft fees
in the coming weeks once its activities regarding credit cards have been
completed.
Source:
Getting Paid
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