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30 January 2012
Consumer charity Which? has slammed banks' unauthorised overdraft charges for being too complicated for consumers to calculate.
Which? said it asked a group of consumers to work out the cost of an unauthorised overdraft for four different banks by giving them a mock bank statement. Despite one of the volunteers being a maths PhD student, Which? said that not one got all the calculations right, only managing to get seven out of 48 correct between them.
This is in stark contrast to payday loans, which are a simple product and consumers understand what they are being charged. Unlike overdrafts, a payday loan's APR must also be presented, despite it not necessarily being the best representation of the cost.
Which? said that not only did banks place a myriad of complex rules on their charges, but also extra fees and that some customers could be paying over twice as much a month for an unauthorised overdraft with one bank compared to another.
