Wednesday 13th September 2006
Banks and building societies have increased the cost of their penalty charges by an average of 20 per cent over the last three years, according to a new study.
The report by Defaqto found that the average penalties for unpaid standing orders, direct debits and bounced cheques have risen by £3 to over £30 since 2003.
The study comes on the back of an announcement that the Office of Fair Trading has cut default charges among credit cards to £12 and that it is considering similar measures on current accounts, meaning dipping in to your overdraft may not be such a costly experience in future.
"Someone has to pay for the service, and in the case of accounts where banks do not charge a fee, it is those customers who go overdrawn and/or incur default charges," explained David Black, head of banking at Defaqto.
The findings are further evidence of the necessity that customers shop around for the best current account deals, especially if changes to the system of fees occur.
Abbey, Nationwide and First Direct are among the firms that currently do not charge stopped cheque fees.
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