Credit Cards & Loans
Bank charges thrust millions into unauthorised overdrafts
More than 11 million current account holders have been pushed into unauthorised overdrafts because of bank charges, research reveals.
The report by thinkmoney found 42% of current account holders have paid bank charges in the past – 57% of whom have been pushed into an unauthorised overdraft as a result.
While the average amount paid in charges over the last year comes to £46.84, a third of those charged have paid more than £50 in that time, and one in six have paid more than £100.
What’s more, 5% of those with a current account – around 2.3 million people – do not actually know whether they have ever been charged by their bank. And 3% of those who have been charged in the last 12 months don’t know how much it has cost them.
Other reasons for bank charges include bounced direct debits and unpaid standing orders.
Ian Williams, head of PR and communications at thinkmoney, said:
“Although 58% of those questioned have never paid bank charges, more than four in ten have – and many of those have experienced further problems as a direct result.
“People who have lost lots of money through bank charges should be aware that there are alternatives available – such as the thinkmoney Personal Account.”
Most common bank charges
Charge | Paid by % of account holders |
Unauthorised overdraft fees | 20% (9.4 million people) |
Unauthorised overdraft daily charges | 15% (7 million people) |
Overdraft warning letters from bank |
14% (6.1 million people) |
Bounced direct debits | 13% (6.1 million people) |
Unpaid standing orders | 8% (3.8 million people) |
Other penalty charges | 7% (3.3 million people) |
Bounced cheques | 6% (2.8 million people) |