By James Simons-
Three major UK banks have been knocking their customers with extortionate overdraft costs rise this month
A new report, titled Stuck in the Red, StepChange has revealed that 2.1 million people were constantly overdrawn, going into the red in every month of 2016. Around half of the charity’s clients have overdraft debt, with the average amount owed put at £1,722.
Financial charity StepChange have urged banks to end all unauthorised overdraft charges and stop trapping people in persistent debt. Many customers of these banks are not aware of the extra charges, but will be disappointed to learn of the extra charges.
Santander, Royal Bank of Scotland and NatWest still offer their customers unplanned borrowing as they maximise their efforts to earn more money. Santander shockingly run charges of up to £95 for each month a customer is overdrawn.
The revelation is shocking and reveals the level of financial exploitation being operated by greedy bank bosses. RBS, NatWest and HSBC charge £80 a month. Bank bosses should be sensitive to the financial demands of their customers rather than seeing them as objects of exploitation.
Head of policy at StepChange said:
“Lenders and regulators must take action to need to ensure that overdraft lending is affordable, that borrowers in financial difficulty get the right support and that we break the cycle of persistent overdraft debt,” said Peter Tatton, head of policy at StepChange.
Last month, a shake-up of overdraft fees took effect, meaning some are paying more.
Lloyds and Halifax customers are paying less, but some banks have brought in a new flat fee of 1p a day for every £7 that someone borrows over their fee-free limit.
The biggest losers will be customers who have large agreed overdrafts and use them a lot.
Someone who has a £1,000 overdraft limit and uses it for 10 days a month will now pay £14.20 in fees, against £10.88 before, and if they are permanently overdrawn it will cost even more.
Santander, Royal Bank of Scotland and NatWest still offer unplanned borrowing.
Santander charges up to £95 for each month a customer is overdrawn.
RBS, NatWest and HSBC have a cap of £80 a month
Millions of customers at three major UK banks have seen their overdraft costs rise this month.
Worryingly for many account holders, the rise works out at hundreds of pounds a year.
After the rise, financial charity StepChange claimed banks should end all unauthorised overdraft charges because they are trapping people in persistent debt.
More than two million are stuck with a permanent overdraft.
In a new report, titled Stuck in the Red, StepChange say 2.1 million people were constantly overdrawn, going into the red in every month of 2016.
Around half of the charity’s clients have overdraft debt, with the average amount owed put at £1,722.
Last month, a shake-up of overdraft fees took effect, meaning some are paying more.
The biggest losers will be customers who have large agreed overdrafts and use them a lot.
Someone who has a £1,000 overdraft limit and uses it for 10 days a month will now pay £14.20 in fees, against £10.88 before, and if they are permanently overdrawn it will cost even more.