As the banks switch from quarterly to monthly charges, Mr Brown said charges ranged from 40 to more than 1 million per cent in real terms.
Calculations on the standard annual percentage rate (APR) measured from the banks' own information and confirmed by the House of Commons statistical section reveal substantial penalties for customers who go overdrawn or exceed their authorised overdraft limit.
The widely differing penalties vary according to the combination of banks' standard fees for unauthorised overdrafts and substantial interest rates.
NatWest information, for example, shows a daily charge of pounds 3.50 on an unauthorised pounds 100 loan, plus interest at 29.8 per cent; pounds 9 a month is charged on unauthorised pounds 1,000 overdrafts, plus interest.
Mr Brown claimed charges were little short of usurious. 'Millions of people will be shocked at these figures and will expect the new Chancellor to take immediate action on behalf of the consumer,' he said.
John Butterfill, vice-chairman of the Tory backbench finance committee, called the figures 'silly', saying they were based on adding in charges banks made to tell customers they had gone overdrawn.
But Mr Brown said: 'When you have both interest rates plus commission and charges then I think it is fair to reflect both of them in what is eventually the final interest rate being charged.'
The four main high-street banks defended themselves, complaining that Mr Brown's figures bore no relation to reality. Barclays accused him of attempting to grab headlines. 'It is meaningless to quote annual percentage rates in this way,' a spokesman said. 'Authorised and unauthorised charges just do not work like that.'
NatWest was at a loss to explain how Mr Brown had arrived at his figure of more than one million per cent. However, a bank spokesman said: 'There is no way on earth a customer would be overdrawn for a year. It certainly couldn't happen without the customer's knowledge. This is completely unrealistic.'
Lloyds and the Midland said customers would not be allowed to get into such a position.Reuse content