Seven high street banks are appealing a High Court ruling over unfair bank charges. But when it comes to extracting money from customers, the banks are past masters - as a quick scan over their terms and conditions will testify.
Here is a run-down of some of the charges you will pay if you don’t read the fine print...
1. Unpaid item charge:
This is the charge currently making waves in the High Court. The Office of Fair Trading says they are unfair whilst the banks, surprise, surprise, disagree. The problem is not the idea of charging customers for spending money they don’t have, it is the practice of charging up to £35 for falling short by even a few pounds. Remember that money transfers take time to process (even between two accounts with the same bank) and make sure you have money in your account when the monthly direct debits start to go out.
2. Unauthorised overdraft fee:
Just like the unpaid item charge, this one is having its day in court. Again, the idea isn’t so bad, but it is hard to escape the notion that some internet banking sites mislead customers – many simply are not clear enough about how much money is cleared and available to spend, so beware and make sure you know where you stand.
3. Using your debit card in Europe:
Some banks charge their customers just to use their cards overseas, some don’t. But they all use exchange rates to make sure they get their cut of every transaction. Check your terms and conditions before you travel.
4. ATM withdrawals:
Very few banks charge us to use ATMs these days, except the freestanding ones you find in shops, motorway services and pubs. But use your card outside the UK and you will pay via an exchange rate levy.
5. Duplicate statement charge:
If you need your bank statements for your tax return, keep hold of them when they drop through the door. Think of them as £5 notes, as that is what it will cost to get hold of a duplicate from some banks. Also, remember that online archives do not always go back 12 months, so cannot be relied upon for a complete annual record.
6. Stopped cheque charge:
It’s very rare that anyone actually needs to stop a cheque, but if it’s a cheque for less than £10, think twice. It is likely that it will cost you more to stop the cheque than to just let it go.
7. Overdraft usage fee:
If you have agreed an overdraft and stay within the limit, you may still pay for it. Some banks charge interest on the overdraft balance, whilst others charge a monthly fee – usually around £5 per month.
8. Telegraphic transfer fee:
Again, it’s a service few of us use regularly, but it’s worth knowing that wiring money to someone is likely to cost anywhere from £10 to £30.
9. Copy cheque charge:
If you ever need to prove that you have paid for something by cheque – by requesting a copy of the cheque from your bank – brace yourself for a charge of around £10.
10. The monthly service charge:
It would be hard not to be aware of this one. But look beyond the free insurance and other tempting treats offered by packaged current accounts and, more often than not, you will find a monthly fee. In some cases it is as high as £25, and there will be a minimum contract term too. You should only consider paying a monthly fee for a current account if you will get value for money from the benefits it provides.
11. Banker’s draft charge:
These days, getting a bankers draft – for instance to put down a deposit on a rented property – will set you back around £10 to £15.
12. Banker’s reference charge:
Some employers and landlords ask for banker’s references before taking on new staff or tenants. If you are in this situation, expect to pay for the privilege – the amount varies, but £10 is about average.
13. Underfunding charge:
If you account is one of a new breed of ‘Premier’ accounts, there will almost certainly be a requirement to pay a certain minimum amount in each month. If you fail to do so, your bank might charge an underfunding fee, typically £5.
14. Special clearance charge:
Even though the technology required to allow instant clearing of deposits has been in place for some time, we must still wait for four days. Unless we agree to pay around £15 for an ‘Express Clearing Service’, that is.
15. Hanging on the phone waiting for customer services:
When you do fall foul of your bank’s small print and want to complain, remember that most now operate ‘local rate’ lines, so waiting for your call to be answered in ‘twenty...one...minutes’ will cost money. Oh and don’t expect any actual customer service when they do answer the phone and don’t have the nerve to disagree with what you are told, or they may just put the phone down – leaving you to go through it all again, or simply give up.
Remember these are just some of the more common charges and fees applied to bank accounts. There are many more obscure charges that are peculiar to individual banks and accounts. So, if you haven’t already read your bank’s terms and conditions, break out the magnifying glass and pay attention to the small print.
