Consumers could accrue bank charges over the Christmas and New Year period

According to recent data released by the consumer group Which? a large percentage of consumers in the UK could be at risk of accruing hefty bank charges by using their overdraft facilities to fund the expense of the Christmas and New Year period.

With Christmas over many may already have gone into the red and accrued charges, and others will continue to dip into their overdraft and risk additional charges over the New Year period and even to fund purchases in the January sales.

The charges are accrued through going over a pre-set overdraft limit without authorization from the bank, and charges are usually a minimum of twenty five to thirty pounds. According to a recent survey that was carried out over half of people using their overdrafts to fund purchases over the festive and New Year period thought that they would most likely end up exceeding their authorised overdraft limit.

An expert from Which? stated: ‘If you know you are going to be overspending speak to your bank beforehand to arrange a sensible credit limit. ‘Just going over your overdraft limit by a few pence can result in unfair and excessive bank charges piling onto your bank account, making the situation worse – and there isn’t much Christmas spirit from the banks when it comes to overdraft charges.’

Many people have now realized that they can actually try and get bank charges removed by writing to the banks and explaining that the unauthorized borrowing took place by mistake. Many banks will not refund the charges, as otherwise the consumer can take the matter to small claims court, which could end up costing the banks even more. However, most banks look very unfavourably on the reclaiming of charges such as these, and consumers that do reclaim their charges could find that the bank subsequently refuses business from them in the future.

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