One financial services industry expert has recently stated that overdraft fee incidences have been on the rise recently.
More and more banks and building societies have taken to attaching fees to their overdrafts. The trend has been a growing one amongst financial services providers to charge for overdraft facilities on such offerings as current account packages. The main rationale behind the behaviour is to shift the focus to certain groups of customers, sources say.
Price comparison website Money Maxim’s online resource managing director, Mark Bower, has spoken out against the move. Mr Bower stated that the change is designed to discourage certain classes of prospective customers from signing up for any given financier’s products through the use of a pricing plan. Instead these customers may choose to pursue other finance options such as a savings account or a credit card.
Independent sources confirm Mr Bower’s assessment. Recent research has revealed that more financial services providers have decided to attach fees to overdrafts. One example of such behaviour comes from Norwich and Peterborough Building Society, who recently confirmed it will be doing so in the immediate future.
Mr Bower also remarked that the ongoing trend reinforces the importance of keeping informed about personal financial products. He recommended that banking customers carefully examine every piece of mail that arrives from their financial providers instead of simply assuming it’s merely junk mail.
Industry experts state that there are several banking institutions that still offer free overdrafts to their customers. While the practice of charging for authorised overdrafts is a trend that has been growing, many institutions have chosen not to follow the example of Norwich and Peterborough. Research indicates that financial providers Smile, First Direct, and Santander all offer free overdraft current accounts to consumers in the UK.
