New research by consumer group Which? debunks the notion of ‘free’ banking – the reality being hundreds of pounds worth of yearly charges for many individuals.
The study reveals that some supposedly ‘free’ account holders are paying almost £1,000 a year for going overdrawn for two days a month without authorisation.
And Which? said that even those that have a set overdraft on their account will accrue substantial fees, with a number of mainstream banks charging a higher annual percentage rate (APR) – 19.9% – than many credit cards or personal loans.
According to the research, consumers will accumulate the highest charge for going overdrawn for two days a month with the Yorkshire/Clydesdale Bank Current Account Plus, which charges £75 a month, equating to £900 a year.
On the other end of the spectrum is the Halifax Reward Current Account, which charges £5 a day for dipping into an unauthorised overdraft, bringing the total bill at the end of the year to £120.
“When some people are paying up to £900 a year in bank charges it completely shatters the myth that banking is free”, said Peter Vicary-Smith, Which? chief executive.
“The suggestion that banks should increase charges to avoid more scandals defies logic and is a slap in the face for consumers who are being hit hard by one of the worst financial crises in recent times.
“It’s a disgrace that the very people who bailed out the banks are being asked to pay more for the most basic accounts, while the industry continues to be rocked by scandals like PPI mis-selling, Libor rate-rigging [Bob Diamonds are not forever] and IT failures.
“Banks must be far more transparent about their fees and charges so that people can clearly see what they already pay.”
The research was carried out in survey form with over 2,000 members of the general public in June and July this year. Sixty-two per cent of respondents confirmed that they had paid a bank charge that was in their mind “unfair, hidden or disproportionate”.
An overwhelming majority – 94% – called for greater transparency amongst banks.
The revelations uncovered by Which? make up just one of a number of reasons to switch to more ethical banks. Amidst the Libor scandal that came to light in July, ethical institutions received an extraordinary amount of interest, with many people opting to move their finances away from the banks involved.
Meanwhile, The Co-operative Bank – the leading ethical bank in the UK – recently announced that it would be taking on 4.8m Lloyds TSB customers, as it looked to place a strong challenge to the high street names.
Which? lays out a number of suggestions in order to make banking friendlier for consumers. These include greater transparency with accounts, so that comparison between a number of options is easy, as well as portable account numbers and a clampdown on high or complex overdraft charges.
Blue & Green Tomorrow’s next monthly guide is on the topic of sustainable, ethical and responsible banking. We’ll be speaking with a number of the leading lights in the UK industry and laying out the options for you to make the leap.
Like our Facebook Page
Prominent Trends in Seafood Sustainability in 2022
Can PEMF Help To Improve Plant Growth for Eco-Friendly Gardeners
How the U.S. Government is Promoting Green Energy in the Country
12 Essential Things for Buying Your First Home
Harnessing Sustainability with User-Centric Technology Innovation
Making Your Dream of Having an Eco-Friendly Garden Come True
Tips for Optimal Waste Management in Your Home
The Agricultural Benefits of Weather Stations for Eco-Friendly Farmers
What Makes Online Furniture Eco-Friendly?
How Eco-Friendly Indian Tourists Can Apply for Visas to Brazil
7 Eco-Friendly Plant-Based Alternatives for Everyday Products
Teaching Them While They’re Young: Sustainability Tips for All Ages
Top 5 Benefits of Eco-Friendly Cars
Why Eco-Friendly Homes Should Have Outdoor Bathrooms
Merits of Sustainability Reporting: What Every Manager Must Know
Low Emission and Clean Air Zones: What You Need To Know
4 Ways To Build A Sustainable Home
Why Transitioning Your Company to an EV Fleet Makes Sense?
CEO Brian Ladin Explains How The Shipping Industry Is Going Green
A Guide to Eco-Friendly Landscaping
- Features11 months ago
Seven Health and Safety Tips for Eco-Friendly Products in a Green Home
- Energy11 months ago
Eco-Friendly Homeowners Lower Carbon Footprints through Greater Air Conditioner Efficiency
- Features10 months ago
Essential Guidelines for Eco-friendly Moving into new Home
- Features10 months ago
5 Compelling Reasons to Hire an Eco-Friendly Contractor