This week we launched a hard-hitting story with uSwitch highlighting how banks could improve the way they deal with customers who slip into the red.
We found that one in eight consumers (13%) have been stung with a combined £300 million in unarranged overdraft fees over the last year, yet banks are preventing customers from getting rid of this costly credit facility.
uSwitch.com is calling on all banks to offer every customer the ability to opt out of their unarranged overdraft, so they can avoid these costly charges and better manage their finances.
Tom Lyon, money expert at uSwitch.com, says: “Banks are raking in millions every year from unarranged overdrafts and failing to do everything they can to prevent customers from dipping deeper into the red.
“Consent and, ultimately, control over finances needs to be in the hands of consumers. Yet, too many are in the dark about whether they can turn off their unarranged overdraft facility and avoid these extortionate fees. If consumers would rather have their card declined at the checkout than be stung by sky-high fees, they should be given the option to do so.
“We urge banks to offer every customer the option to deactivate their unarranged overdraft. In the meantime, customers should contact their bank and set up text alerts for when their account balance is low, so they can take action before drifting into an unarranged overdraft. Overdraft costs vary widely between banks, so it also pays to compare all the options available to you and switch if you find a better deal.”