Guiding consumers since 2009

UK report: So much for 'free' banking

By Staff Writer

By Michael Coulson, Fin24

One of the first columns I wrote for Fin24.com concerned the fees private clients are charged by SA banks. I warned that though these might be exorbitant - as was confirmed by the subsequent inquiry - comparisons with the "free" banking allegedly offered in countries like the UK may be misleading. And so indeed it has proved.

An inquiry by the UK government's Office of Fair Trading, released late last week, claims that concealed and sometimes irregular charges on current accounts tot up to an amazing £8.3bn a year, or an average of £152 on each of the 64m accounts.

The biggest items come from £4.1bn interest the banks earn on current account balances - which seldom pay interest to the account holders - and £2.6bn charges on customers who exceed their overdraft limits.

Justmoney.co.za says: Michael Coulson explodes the myth of UK "free banking". HSBC alone set aside million of pounds last year to settle claims against customers who felt they had been over-charged or charged incorrectly with punitive fees.

However, this should also be a warning to South African banks to get their houses in order with fair and transparent bank charges.

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