Offer Overdraft Opt-Out, Banks Told

• News
• Published: 16 Mar 2010 in Money and Current Accounts

Bank customers should be offered the choice to opt out of having overdraft facilities on their current accounts, the Office of Fair Trading (OFT) has argued.

The consumer watchdog also called for more choice when it comes to charging systems.

The calls came as the OFT set out its recommendations on the future of bank charges, also calling for improvements on charges for unarranged overdrafts on current accounts.

It admitted that charges have already started to come down - with bounced charges, levied when a bank refuses to make a payment, falling from an average of £34 in 2007 to around £17.

And customers who go into an unauthorised overdraft have seen the average penalties ease back from £30 per transaction in 2007 to around £22, according to the OFT.

The latest report follows the OFT's surprise defeat in the Supreme Court over previously charged overdraft fees.

John Fingleton, chief executive of the OFT, said: "We believe that the commitments agreed by the industry today, along with changes by individual banks already made or expected in the next two years, should lead to a market that works better for consumers."

Banks have committed to developing minimum standards when offering customers the ability to opt out of unarranged overdraft facilities, while they will introduce best practices for customers in financial difficulty who incur unarranged overdraft charges.