Bank Customers Would Prefer to Block Payments

A recent study conducted by consumer champion Which? revealed that banking customers would rather have their payments rejected than have their accounts go overdrawn.  Nearly half of the account holders surveyed reported that they would prefer banks to block payments that would put their accounts into the red, rather than have the payments honoured and end up with an unauthorised overdraft and the sizable fee that goes along with it.  Most people feel that these fees are unreasonable and unfair because they did not ask for an overdraft service on their accounts.

This latest research was done following Wednesday’s Supreme Court ruling that the OFT (Office of Fair Trade) will not be able to assess whether or not unauthorised overdraft charges are fair.  This gives banks the freedom to allow accounts to become overdrawn if necessary to honour payments, and then charge the account holder additional fees on the overdrawn amount.  This is just one more chapter in the ongoing dispute between banks and the Office of Fair Trade regarding the fairness of the many bank charges that British account holders have been getting bombarded with lately.

In light of these most recent developments, Which? has called on banks to change their policies to make the unauthorised overdraft a service that is optional.  Which? would also like to see changes to the regulations regarding unfair terms in consumer contracts so that the banks will be required to set more reasonable fees so that their customers will be charged more fairly in the future.

According to Phil Jones, personal finance campaigner for Which?, a one size fits all approach does not work when dealing with overdraft charges because different people use their bank accounts in different ways.  Unauthorised overdrafts amount to customers being loaned money that they didn’t ask for, then they are charged unreasonable fees for it.  An expensive service such as this should not be forced upon people who did not ask for it, because not everyone can afford this type of service.  Jones emphasises that what Which? really wants is for banks to demonstrate that they are willing to listen to their customers and respond to what they want by making the unauthorised overdraft a service that is available only to the people who ask for it and are willing and able to pay for it.