Bank fees – The overdraft fee truth
We’ve all seen the media hype and general hysteria towards payday lenders, but were you aware that in many instances a bank overdraft fee is actually charged at a higher APR than that of a payday lender?! The banks tend to want to keep this quiet, for obvious reasons.
The overdraft industry
Let’s take a look at the truth behind the amount of money generated for the banks by their astronomical interest and fees charged on overdrafts, and unauthorised overdrafts.
The Payday industry is worth just over £2 billion a year, and with new rules set to come into force which include the capping of interest rates, this figure is likely to drop significantly.
When we compare this to the huge £8 billion a year that is generated for banks, it really shows the extent of the cover-up. With the media generally based in London along with the major banks it’s not difficult to understand why the media don’t tend to run this story, as I imagine it could ruin a few cosy lunch dates!
A closer look
Let’s take a quick look at the differences by looking at some examples between a payday loan, and the cost of going over your agreed overdraft by £100…
A payday loan of £100, taken over 30 days will typically cost around £30 in interest, thus being £130 to repay.
HSBC & First Direct : £5 daily bank fees up to £80, thus being £180 to repay.
Lloyds : £10 daily bank fees up to £80, thus being £180 to repay.
RBS : £6 daily bank fees up to £90, thus being £190 to repay.
Natwest : £6 daily bank fees up to £90, thus being £190 to repay.
Halifax : £10 daily bank fees up to £100, thus being £200 to repay.
Barclays : £5 daily bank fees up to £35 (with additional £4.50), thus being £139.50 to repay.
Santander : £10 daily bank fees up to £150, thus being £250 to repay.
What would you choose?!
Now I’m not advocating the use of payday lenders as that’s a personal choice and something that I recommend everybody looks at carefully before making a decision. My aim is to point out that banks, as usual, are getting away with treating their customers with utter contempt in order to satisfy shareholders.
More ways the banks may have ripped you off
There have been so many financial scandals uncovered over the last few years it’s almost difficult to know where to start, but I’d just like to highlight two that have had a direct impact on UK consumers.
If you haven’t heard about the HUGE Payment Protection Insurance (PPI) scandal, where have you been?! With an estimated 34 million PPI policies sold, worth a staggering £50 billion, it’s seen as the biggest financial scandal ever to hit the UK. There are billions of pounds in compensation yet to be claimed, and millions of UK consumers who have still to make their claim. I estimate that there are millions out there who are unaware they’ve been mis-sold PPI, such were the tactics of the banks and lenders, who placed PPI onto credit agreements without the knowledge of customers.
Next up is a relatively new scandal that is quickly gathering pace. Do you pay, or have you paid, a monthly fee for your bank account? There are thought to be over 10 million active Packaged Bank Accounts out there, with monthly fees ranging from £5 to £30 per month in exchange for certain ‘benefits and perks’ such as AA cover, mobile phone insurance and travel insurance to name a few. There are many reasons for a potential mis-sale of these accounts and I expect this to be the next big mis-selling news.
So…if you’d like the experts to look into whether you’ve been mis-sold PPI, or a bank account, look no further. Your Money Claim deal with and beat the banks on a daily basis. Even if you’ve settled your mortgage, loan, credit card, hire purchase, store card, or you have an old bank account Your Money Claim have fast-track systems in place to carry out the checks.
To get your claim underway simply fill in the online form, or contact Your Money Claim via telephone, email or via the live chat function, and experts will be on hand every step of the way, from finding out whether you qualify, to hopefully seeing you with a nice big cheque.