The Herald reports that HBOS' new charging structure - in force from tomorrow - will cause serious problems for many customers. Being overdrawn for HBOS customers by up to £2,500 will cost £1 a day, and for more than £2,500 it is £2 a day. For unauthorised overdrafts, it will be £5 a day – with no monthly cap.
More than 50% of the UK population use their overdraft facility on a regular basis, and choosing the wrong facility could cost unwitting borrowers hundreds of pounds a year, according to moneysupermarket.com.
Its research suggests that 17% of us are permanently overdrawn and 13% use an overdraft more than six times a year. For these customers, an agreed overdraft with no charge except interest rates is likely to be a much better option than the new “simple” daily fees.
GLC's Principal Solicitor said: “The bank says it’s simple – it is, but ultimately the problem is it will only benefit those customers who can bring down their overdraft within a couple of days. If you can bring it down quickly it isn’t going to cost you very much, but the vast amount of people who go into overdrafts and unauthorised overdrafts are in financial difficulties. The reason for that is if you have either lost your job or your partner has, or you have lost your overtime, or you have got ill, and you are in a bit of a sticky position or have fallen on hard times, in that situation you are not in a position to find a lump sum of money to bring yourself back into the black.”
The full story is in today's The Herald here.