How effective is the Lloyds TSB charge reduction?
October 26, 2007
Some industry experts are questioning just how effective the reduction in charges put forward by Lloyds TSB will be. The banking giant recently announce changes to its fee structure and charges, stating that the customers’ best interests were behind the changes.
However, not all industry professionals are convinced by this, with many concerned that some customers could actually find themselves worse off under the new fee and charging structure.
The old charge for a bounced cheque from Lloyds TSB was £35 and this is to be reduced to £20. Changes have also been made to the amounts charged for unauthorized use of an overdraft facility. Under the old charging system customers exceeding their overdraft limit or using an unauthorized overdraft were charged £30 with a maximum of three charges per month.
However, under the new system this will be a monthly fee of £15 and then daily charges of between £6 and £20 depending on the size of the overdraft. The daily charges would be applied for a maximum of ten days.
Campaigners are now concerned that no matter how good the bank tries to make these overdraft charges look it means that some customers could end up being charged £200 for exceeding their overdraft limit by £100.
One industry official stated: ‘These charges appear excessive. If you go over by £100 in the course of a month you could end up with total fees of up to £200.’
The Alliance and Leicester has also recently announced similar changes to its charging structures and these have also been met with mixed reactions, as although interest on authorized overdrafts will be cancelled daily charges mean that some customers will not really benefit from the changes.
Alan Wright
26th October 2007
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