Consumers advised 'keep close eye on overdrafts'
Published On 8 January 2007
Consumers should keep a close eye on overdraft reforms this year, according to a new report. Research by Moneysupermarket.com has found that consumers could collectively face bills of around £895 million by going over their overdraft limit just once in the next 12 months.
And with new figures showing that over two in five (43 per cent) of people have gone over their authorised credit limit in the last year, many could face such default charges.
The survey found, on average, consumers pay a default charge of £19.80 each time they go above their agreed overdraft limit.
UK consumers may take relief in the fact that the Office of Fair Trading (OFT) has made investigating current account and overdraft charges its top priority.
Stuart Glendinning, Moneysupermarket.com spokesman, said: "It's true the OFT is likely to force banks to reduce overdraft charges and this may have an impact on overall profitability.
"More alarmingly people seem to have low awareness of their overdraft charges, despite a fair few wallowing in their overdrafts constantly, or the majority of the time.
"The OFT's decision could have a massive impact on the personal banking industry and if people aren't vigilant they could find themselves being denied an overdraft and thus missing paying some of their bills or even ending up paying other new fees."
