The Office of Fair Trading have made their much anticipated announcement on the future of bank charges - find out what impact it'll have on your money.
After the OFT sided with the banks in the high court bank charges case they promised to crack down on unfair charges through other means and began a review to see how this could best be achieved. Today's announcement revealed the results.
Hopes were high, with speculation about strict caps on bank charges circling in the media all week. So when the OFT made their announcement earlier today, their softly, softly approach came as a surprise to everyone.
Instead of enforcing caps of any kind on bank charges, the OFT enthused about the reduction in the so-called 'unfair' charges to date. According to their report the average charge levied on an unauthorised overdraft has fallen from £30 in 2007 to £22; while the average fee applied to unpaid transactions has fallen from £34 to £17.
While this is a step in the right direction, to us the charges still seem disproportionately high and therefore arguably still unreasonable.
This aside, the OFT did make some positive recommendations that should help consumers take more responsibility for their finances and in doing so lessen their chance of incurring charges in the first place.
The OFT's recommendations include:
- Giving customers the option to opt out of having an unauthorised overdraft facility attached to their current account.
- Providing more money management tools to help consumers control their balances and thereby avoid going overdrawn.
- Treating customers who fall into financial difficulty more fairly.
While these suggestions are by no means a quick fix, they will help to give you the ability to protect yourself from unfair bank charges.
As the announcement was only made today, the details as to how and when the banks will implement these changes are still sketchy. Rest assured we'll bring you more information as soon as it's available.
In the meantime it's worth reading our step by step guide that explains how to make sure you stay exempt from bank charges, so you can protect your finances until these recommendations take effect.
