Could Unfair Bank Charges soon be a thing of the Past?

07 Sep 2009 Tell a Friend

Natwest and RBS are among the high-street banks to reduce their unauthorised overdraft fees.  These fees, which previously could total a maximum of £6,688 each month, are charged when a bank customer exceeds their agreed overdraft limit.   The Natwest and RBS fees have now been lowered to a maximum of £15 per day which, whilst you still have the potential to rack up £450 per month if you do not keep a tight rein on your spending, is a significant improvement.

These changes have been implemented ahead of a decision by the Supreme Court about whether the Office of Fair Trading (OFT) has the jurisdiction to regulate the consumer charges put in place by banks.   Although the final decision has not yet been made, banks have not so far been successful in contesting the rulings.  The banks' decision to reduce the charges may therefore be a way of pre-empting the court order to make their charges more consumer-friendly.  Either way, it is a step forward for the consumer, and the decision puts pressure on other major banks to do the same.


In addition to reducing the charges of exceeding an overdraft limit, Natwest and RBS are also reducing the costs of administration for a 'bounced' cheque, direct debit or standing order to £5 from £38 and the account maintenance charge from £28 to £20.  Announcing the changes yesterday, the new CEO of the UK Retail Bank, Brian Hartzer, said: "This is good news for customers, not least because the fees for unarranged borrowing have been an area of ongoing concern for them.