Do overdraft charges make you see red?

Your current account has just picked up the financial equivalent of an anti-social behaviour order.

The Which? consumer group today launches its own Asbo campaign - substituting the word "banking" for "behaviour". The aim is to name and shame the big banks and the high charges they impose on customers who stray into unauthorised overdrafts.

These can be as much as £35 for a bounced cheque. Recent research by the moneysupermarket.com price-comparison website shows that, on average, the cost has risen by a third over the past year to £32.22.

In 2004, unauthorised overdrafts cost personal account holders £3bn.

"These charges are nothing but an easy money-spinner for the banks," says Doug Taylor of Which?. "Charges should be fair and reflect the costs involved - not, as they are now, an arbitrary figure picked to make the most money out of unsuspecting customers."

Which? has written to the Financial Services Authority asking the regulator to investigate the legality of the practice.

Pressure on banks to reduce their charges has increased in recent months. Consumer websites such as bankchargeshell.co.uk and penaltycharges.co.uk have already gained huge support from customers fed up with high penalty fees for what is often a small transgression.

Many people have threatened to take their banks to court in protest at the charges - and in some cases, lenders have backed down ahead of legal proceedings.

So far, the industry has refused to contest cases in court. Protesters, including Vince Cable, the Liberal Democrats' Treasury spokesman, believe that's because it is on shaky legal ground over the size of un- authorised overdraft fees.

Which? is counting on this. Its campaign website (www.which.co.uk/bankingcharges) includes a template that can be downloaded to challenge the banks - through the small claims court, in the first instance - and help you reclaim your money.

Meanwhile, separate research from uswitch.com, another price-comparison website, suggests that nearly half of all current account users don't know the interest rate charged by their bank for an authorised overdraft. The average is 12.25 per cent, it says. With the size of the average overdraft hovering around £677, that means consumers are paying more than £1.1bn a year in interest charges.

Among lenders offering the lowest interest rates on overdrafts are Alliance & Leicester (5.9 per cent on its Premier Direct online account) and Nationwide (7.75 per cent).