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17/01/2012
Bank Overdrafts Are Too Complicated Says Study
A study by a leading consumer interest group has found that bank charges for overdrafts are too complicated.
The research by Which? revealed it was difficult to calculate unauthorised bank charges under the current charging structures of the main banks.
Which? experts said people using unauthorised overdrafts would find it virtually impossible to calculate how much their bank would charge them, or to compare charges between banks as the fee structures are so complicated.
The group said that, as part of their study, they asked a group of Which? members to work out the cost of an unauthorised overdraft for four different banks by giving them a mock bank statement.
Despite one of the volunteers being a maths PhD student, not one got all the calculations right, only managing to get seven out of 48 correct answers between them.
One volunteer commented: "Details on rates and charges should be accessible, be in plain English and in a standard format, so that banks can be easily compared. At the moment you need to be both a detective and have a PhD in maths to work out what you may owe."
Another said: "I like to think I'm reasonably intelligent, but I couldn't get my head around this information and found it impossible to calculate".
Which? said they also found people could paying over twice as much a month of an unauthorised overdraft with one bank compared to another.
(DW/GK)
The research by Which? revealed it was difficult to calculate unauthorised bank charges under the current charging structures of the main banks.
Which? experts said people using unauthorised overdrafts would find it virtually impossible to calculate how much their bank would charge them, or to compare charges between banks as the fee structures are so complicated.
The group said that, as part of their study, they asked a group of Which? members to work out the cost of an unauthorised overdraft for four different banks by giving them a mock bank statement.
Despite one of the volunteers being a maths PhD student, not one got all the calculations right, only managing to get seven out of 48 correct answers between them.
One volunteer commented: "Details on rates and charges should be accessible, be in plain English and in a standard format, so that banks can be easily compared. At the moment you need to be both a detective and have a PhD in maths to work out what you may owe."
Another said: "I like to think I'm reasonably intelligent, but I couldn't get my head around this information and found it impossible to calculate".
Which? said they also found people could paying over twice as much a month of an unauthorised overdraft with one bank compared to another.
(DW/GK)
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