Which? is calling on the Financial Conduct Authority to clamp down on “high or complex” bank overdraft charges after research revealed customers with ‘free’ current accounts face fees of up to £900 a year.
Which? has today published new research on bank charges which it claims “shatters the myth” of free banking.
The consumer body says customers with ‘free’ current accounts who are overdrawn for two days a month without permission face charges of between £120 and £900 a year.
Furthermore, Which? says HSBC and RBS/Natwest customers with authorised overdrafts are still charged an annual percentage rate of 19.9 per cent.
Which? chief executive Peter Vicary-Smith (pictured) says: “When some people are paying up to £900 a year in bank charges it completely shatters the myth that banking is free.
“The suggestion that banks should increase charges to avoid more scandals defies logic and is a slap in the face for consumers who are being hit hard by one of the worst financial crises in recent times.
“Banks must be far more transparent about their fees and charges so that people can clearly see what they already pay.”
Which? wants the FCA to investigate overdraft charges when it comes into being next year.
It is also calling for increased competition among high street banks, the introduction of portable accounts to make switching banks easier and for all banks to provide electronic information so people can compare charges between banks.