Overdrafts: ‘too high, too complex, and impossible to compare’

‘Too high, too complex and impossible to compare.’ That’s consumer champion Which? Money’s verdict on unauthorised bank overdrafts.

Which? research found that it was virtually impossible for consumers to calculate how much their bank would charge them for an overdraft, or even to compare charges between banks, such is the complexity of the structures in use and the multitude of fees applicable.

 “While the Government has previously announced reforms to tackle unfair overdraft charges, they simply don’t go far enough. It’s extremely disappointing to find that bank charges are still too high, too complex and impossible to compare,” said Which? Chief Executive, Peter Vicary-Smith.

“It’s essential that the Government gives the new financial regulator the powers to limit these charges and to challenge their complexity.  We want to see the new regulator put consumer protection at the heart of everything it does. The regulator must be a strong, open and proactive watchdog that stands up to the banks, not a lapdog."

Which? Has called on the financial regulator, the Financial Conduct Authority, to be responsible for putting an end to unfair overdraft charges and has also requested that banks make account comparisons easier to accomplish.