Banks Accused Of Profiteering From Worst Off

New Bank of England figures have revealed authorised overdraft rates reached 19.09% in October, the highest since records began.  The rate is 38 times higher than the Bank of England base rate and 10 times higher than the average rate paid on accounts in credit.  The higher rates are the result of banks introducing a new, simplified structure to authorised and unauthorised overdraft charges.  However, the rates have been heavily criticised by some who believe the least well off members of society will be hardest hit.

New Bank of England figures have revealed authorised overdraft rates reached 19.09% in October, the highest since records began.  The rate is 38 times higher than the Bank of England base rate and 10 times higher than the average rate paid on accounts in credit.  The higher rates are the result of banks introducing a new, simplified structure to authorised and unauthorised overdraft charges.  However, the rates have been heavily criticised by some who believe the least well off members of society will be hardest hit.

Andrew Hagger, from financial information website Moneynet, firmly disagrees with the changes, “When an overdraft is unauthorised, you can understand the idea that you are charged when you go further into the red”…“But to ask to borrow money and then be charged these exorbitant rates is just very difficult to swallow”

Treasury Select Committee member and Labour MP Chuka Umunna said: 'These charges are outrageous when the people they are imposing them on are the ones having to pay for the mess the banking sector created.

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