Bank customers count cost of double dating

FIRST DIRECT will charge customers pounds 60 for exceeding their overdraft limit for just a few days - if those few days happen to coincide with the end of one month and the beginning of the next.

The bank will offer to refund half that amount if the customer comes to some agreement about the overdraft limit. But in some cases, it may choose not to make such a refund.

None of the other leading banks operates the same sort of system with a similar level of charges.

First Direct's system of charging first and negotiating a refund enraged one customer so much that she is returning to her old bank, the Co-op, after just one year.

Linda Brown, a college finance officer in Wales, went through her pounds 250 overdraft limit on the last day of August. She was charged the standard First Direct fee of pounds 30 for an unauthorised overdraft on the following day - 1 September.

This was for exceeding her overdraft limit in August. One day later, on 2 September, she was charged a further pounds 30 for being beyond her overdraft limit in September.

Ms Brown said: 'At least with the other banks, the charges are on a certain date each month. There is no way that First Direct would agree that the charges were unfair, so I am now returning to my old bank, which provides a far better telephone service as well as face-to-face banking if required.'

She said that she had gone over her overdraft limit on one previous occasion, and First Direct had given her a refund.

Peter Simpson, First Direct's commercial director, pointed out that each customer was given a free overdraft facility of pounds 250.

He said: 'We would normally be quite flexible about the second charge. We expect our customers to contact us and talk to us about it.'

As well as the flat fee, First Direct will also charge its customers a further pounds 7.50 for each transaction that increases the overdraft.

After the Independent on Sunday contacted First Direct, it offered to refund Ms Brown the additional pounds 30. Despite this, she is still planning to return to her old bank.

There are vast differences between banks with respect to their charging structures for unauthorised overdrafts.

Some will charge a flat rate, plus a flat fee for the amount of time that the account has an unauthorised overdraft. Others will charge a percentage rate, and some will charge a daily rate.

Midland Bank, which owns First Direct, charges its customers pounds 7 for breaking an overdraft limit in the first place, plus a further pounds 10 a month for each month the account remains over the limit.

A Midland spokesman said that in theory somebody could be charged a maximum of pounds 27 for exceeding an overdraft limit for just a few days at the end of one month or the beginning of the next, depending in whether the customer chose the account period as a calendar month, or dated the monthly cycle from the day the account was opened.

The spokesman said: 'The individual branch managers are flexible about the charge.'

Barclays offers a staggered charge, depending on the amount by which the customer has exceeded the overdraft limit.

TSB levies an administration charge, plus a percentage of the amount overdrawn. Other banks charge people about pounds 7 for each day over the limit.

----------------------------------------------------------------- UNAUTHORISED OVERDRAFT CHARGES ----------------------------------------------------------------- Bank Monthly interest rate (%) and cash penalties First Direct 2.33%, plus pounds 30, plus pounds 7.50 each transaction Midland 2.12%, plus pounds 17 TSB 2.20%, plus pounds 6 Barclays 2.25%, plus pounds 15 (OD pounds 50- pounds 200) or pounds 30 (over pounds 200) NatWest 2.40%, plus pounds 9 Lloyds 2.00%, plus pounds 8, plus pounds 7 each day OD rises by pounds 10 -----------------------------------------------------------------

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