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RBS and NatWest cut overdraft charges
Tuesday, 8 September 2009 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.ukRoyal Bank of Scotland and NatWest are slashing the cost of a bounced cheque, from £38 to £5 next month.
Royal Bank of Scotland (RBS) (www.rbs.co.uk) is reducing overdraft charges for its 12.5million current account customers.
| Any reduction in unauthorised overdraft charges is good news. |
The changes, which come into effect on 1 October, include the following:
- The charge for a bounced cheque or an unpaid direct debit or standing order will fall from £38 to £5
- The charge for paying for an item on an overdrawn account will be halved from £30 to £15
- The charge for making a payment using a cheque guarantee card while overdrawn will fall from £35 to £15.
These changes will also affect customers of NatWest (www.natwest.com), which is owned by RBS.
The move comes ahead of the House of Lord's decision on the Office of Fair Trading’s legal case against bank charges, which is set to be published next month. However, RBS has stressed that these changes will not affect past charges.
A recent investigation by consumer champion Which? (www.which.co.uk) found that RBS’s penalty charges for unauthorised overdrafts were the highest among the 13 biggest banks and building societies in the UK.
Peter Vicary-Smith, chief executive of Which? responded to the latest changes: “If RBS and NatWest truly want to get back in their customers’ good books, they should admit defeat in the bank charges test case and repay the millions of pounds Which? believes they’ve been unfairly taking from their current account holders for years.”
Chris Eagle, commercial manager at Creditchoices.co.uk, said: “While any reduction in unauthorised overdraft charges is good news, if you find yourself frequently slipping into the red you should think about switching to a current account that offers a free overdraft.
“For example, the Alliance & Leicester (www.alliance-leicester.co.uk) Premier current account offers a 12-month interest-free overdraft up to £2,000. Plus, if you switch now you could claim £100 free cash.”
More information on the Alliance & Leicester Premier current account