Office of Fair Trading to look at unauthorised overdraft charges
A review of the UK banking sector which began back in 2007, specifically focused upon unauthorised overdraft charges, is set to be completed this year with a review of Lloyds TSB, Clydesdale and HSBC unauthorised overdraft operations. The OFT has specifically chosen these three banks, not because they are in any way better or worse than any other UK bank but because between them they cover the vast majority of overdraft charge terms of conditions. As a consequence, a ruling against this group of banks can be applied to the rest of the UK banking sector.
Unauthorised overdrafts have long been a bone of contention with regulators and customers alike. There are literally millions of people in the UK who have received significant overdraft charges which in many cases have run into the hundreds of pounds where customers have gone overdrawn by only a few pence. The system is in serious need of change and is yet another blow to the UK banking sector which has received significant income from this particular area.
Each new regulatory review of the UK banking sector seems to push forward the likelihood of a cessation of "free banking" in the UK. Whether we have ever really had "free banking" is very much open to debate.
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