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Consumers warned of unauthorised overdraft fees

Published: 12/01/2010

Consumers should be prepared to make an authorised extension to their overdraft, an industry expert as advised.

While people may be tempted not to look at their bank account after Christmas and the January sales, Andrew Hagger from Moneynet.co.uk has warned that this will only lead to further payments.

Ignoring your bank balance can lead to dangerously high unauthorised overdraft fees which are not necessary.

Mr Hagger said: "The cost of an authorised overdraft is a mere fraction of the cost of unauthorised borrowing, and arranging a temporary increase for a couple of months whilst you get your finances back on track could save you from some crippling bank charges which could turn a minor problem into something more serious."

He added that many customers were unaware of the charges they risked paying because a lack of common policy meant that charges from different banks can vary wildly.

An unauthorised overdraft extension of £150 for a week could cost £155 at Lloyds TSB but only £25 from HSBC.

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Last Updated: 11-02-2012