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Thursday, September 10, 2009

RBS Cuts Charges

RBS (the taxpayer funded bank) and its NatWest subsidiary have, admittedly by implication, admitted what everyone knew all along, namely that bank charges for bounced cheques etc are simple profiteering.

RBS and Natwest have announced that they are cutting the fees they charge customers who go overdrawn without agreement, or exceed their overdraft limit.

As from 1 October, charges for a "bounced" cheque, direct debit or standing order will fall to £5, down from £38.

Other charges such as maintenance charges for overdrawn accounts and the paid referral fee will also be reduced.

Clearly, were the administration costs to the banks really that high then these cuts would never have been made.

Currently eight lenders are challenging the right of the Office of Fair Trading to decide if overdraft charges are fair or not, in the face of a million claims by hapless bank customers for the return of their unauthorised overdraft charges.

As to whether other banks follow suit remains to be seen.

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