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Banks make huge profits from overdraft fees

August 22, 2008 by admin  
Filed under News, News-Banking

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A recent report has suggested that banks are making huge profits from the controversial overdraft fees, which have been in the financial headlines lately having been at the centre of a high court test case with regards to their fairness, with some banks charging close to £40 per fee even though the cost to the bank is often just a few pounds.

The report showed that some banks were making around £2.5 billion a year as a result of overdraft charges, and with Brits already struggling to keep on top of their finances this is causing major financial headaches for many. The Office of Fair Trading is due to soon release officials figures with regards to how much the bank are earning from overdraft charges from consumers.

At present there are many claims still pending with regards to claims for refunds on overdraft charges, as the judge has yet to come to a decision with regards to these fees. Many people have already claimed back charges going back as far as six years, although banks have now been given more time to respond to these claims, whilst the judge tried to reach a conclusion with regards to this issue.

These charges were imposed as a result of people going over their overdraft limits, and also for bounced cheques and returned direct debits. Officials from the Office of Fair Trading took a number of major banks to court as part of the test case, stating that the charges that they were imposing were far greater than the costs that were being incurred by the banks, making the fees unfair and unjust.

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Tags: overdrafts, interest, overdraft limits, conclusion, cut

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  1. Majority of parking fine appeals won by consumers says:
    August 22, 2008 at 10:23 am

    [...] Banks make huge profits from overdraft fees [...]



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