£1-a-day overdraft fee causes controversy
By Lezanne Janse van Rensburg, 21st December
2009
Halifax's decision to implement a ₤1-a-day overdraft fee is
costing them dearly.
Since announcing their plans to introduce overdraft fees to
customers not in credit, Halifax has seen more than 70,000
disgruntled account holders walk out their doors.
Rival banks, such as HSBC, Abbey and Nationwide, has seen
thousands of former Halifax customers flooding their doorways after
hearing of the proposed new bank charges.
The new overdraft charges would lead to many consumers having to
pay hundreds of pounds each year for even the smallest borrowing
limits. According to Halifax's proposal, account holders will be
paying ₤1 a day when given permission to go into the red, while
customers who take an unauthorised overdraft will be facing a
staggering daily bank charge of ₤5.
Customers who take an unauthorised
overdraft will be facing a staggering daily bank charge of
₤5.
Halifax, of which 43 percent is owned by taxpayers, has seen an
unprecedented amount of account holders closing accounts and
switching to other banks. Experts within the banking sector stated
that the sudden introduction of overdraft charges has lead to tens
of thousands of customers seeking more profitable deals.
Experts also added that the initial number of 70,000 account
closures could be even higher due to many customers with
multiple accounts only closing one of their accounts.
The majority of account holders only switched banks a few days
ago as the daily overdraft fees were officially implemented. The
newly introduced bank charges could be detrimental to the existence
of Halifax as competition within the banking sector's current
account market is increasing rapidly.
According to Halifax there have been a number of customers who
have opened a Reward Account during the last year. In reaction to
the overwhelming anger over the overdraft fees, the bank's
spokesperson said: "If any customer is in any doubt, they should
get in touch so we can ensure they are in the best account."
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