Consumer group Which? wants the new financial regulator the Financial Conduct Authority, to ‘butch up’ and put a stop to unfair overdraft charges from the banks.
It believes the the FCA should be held accountable for putting a stop to unfair overdraft charges, with clear powers to tackle excessive fees and complicated structures.
Banks should also be forced to provide electronic information to consumers about the way they use their current accounts to allow them to make 'one click' comparisons between accounts. The organisation says that it has discovered that consumers using unauthorised overdrafts would find it virtually impossible to calculate how much their bank would charge them, or to compare charges between banks, as the fee structures are so complicated.
Which? asked a group of consumers to work out the cost of an unauthorised overdraft for four different banks by giving them a mock bank statement. Despite one of the volunteers being a maths PhD student, not one got all the calculations right, only managing to get seven out of 48 correct between them.
Which? chief executive, PeterVicary-Smith, says: "While the Government has previously announced reforms to tackle unfair overdraft charges, they simply don't go far enough. It's extremely disappointing to find that bank charges are still too high, too complex and impossible to compare.
He continued: "It's essential that the Government gives the new financial regulator the powers to limit these charges and to challenge their complexity," he continued. "We want to see the new regulator put consumer protection at the heart of everything it does. The regulator must be a strong, open and proactive watchdog that stands up to the banks, not a lapdog."