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UK banks forced to detail overdraft charges in the future

The Office of Fair Trading (OFT) has today confirmed an arrangement with 95% of UK banks and building societies which will see overdraft charges detailed more clearly in future bank statements. This would appear to be step one in the fight to make current account more transparent and make customers aware of various scenarios which may well see them receive significant overdraft charges.

While we still await the outcome of a court case regarding historic overdraft charges, which the OFT believes were excessive, the industry would appear to have admitted that changes need to be made for the future. The changes which are coming in should make it easier to compare like-for-like current account arrangements and may well see the end of "free banking" in the UK, if this has ever been the case!

However, even though the announcement by the OFT and the ongoing court case are certainly beneficial to UK consumers, make no mistake that the banking industry cannot afford to give away the billions of pounds which overdraft charges brought in. Other charges will be detailed in the future as the industry reorganises itself to take on the challenges of shareholder expectations and customer requirements. What customers receive back with one hand could be taken away by the other!

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