ABOUT 2.5 million people have used an unauthorised overdraft in the last year and more than two thirds say the fees and charges are too high or unfair, a survey published today reveals.
Of those who have fallen into an unauthorised overdraft – about the same number as those who have used a payday loan – more than a third were surprised by the amount they were charged and 68 per cent said the costs were too high, according to the Which? poll.
The consumer group confirmed almost 25,000 people had signed up to support its Stop Sneaky Fees and Charges campaign that calls for an end to fees across the financial sector that are hidden, excessive or make the total cost difficult to understand and compare.
Which? executive director Richard Lloyd said: “Consumers are fed up of being hit by complex and costly charges which make it almost impossible for them to shop around for the best deal for their needs.
“We want all banks and current account providers to stop sneaky fees and charges and put an end to excessive, unclear and hard to compare unauthorised overdraft fees that could leave consumers paying over the odds.”
While it welcomed changes made by providers, Which? said there were still too many charging structures that made it hard for consumers to make like-for-like comparisons and select the best product for their needs.
These included charging interest, a set daily and/or monthly fee or a combination of these fees, which were in addition to set-up fees or paid and unpaid transaction fees that could take customers further into the red.
There was also a lack of consistency in how providers displayed charges on their websites, making it difficult to calculate fees and meaning consumers risked paying substantially higher charges than necessary.
Which? is calling on all providers to allow customers to opt in and opt out of unauthorised overdrafts at no extra cost, with opt-out being the default position when an account is set up.
It also wants providers to give easy access to transaction data to allow consumers to get the best current account for their needs.