Banks ‘backing down on overdraft rates’

Many of the high street banks around the UK are backing down over the issue of unauthorised current account overdraft rates, according to one financial comparison firm.

Research by MoneyExpert.com has established that the average rate charged for this particular kind of unauthorised lending has fallen from around 25.25 per cent to just over 20 per cent.

Despite this apparent back track on the issue, the banks are still fighting a court battle with the Office of Fair Trading over alleged unfair charges and many people are finding their debt management difficulties worsened by creditor behaviour.

“It is encouraging that average unauthorised overdraft rates have dropped by five per cent in the past year,” commented MoneyExpert.com’s chief executive Sean Gardener.

“That said though a 20 per cent rate is still very high and well above the average standard credit card rate.”

A report last week from Birmingham Midshires suggested that thousands of British consumers are raiding their savings accounts to deal with their growing debt management problems.