Bank suspends charges

GLENDA COOPER

Barclays Bank will suspend charges for people who go into the red by mistake, after research found that two out of three people think banks put overdraft charges before customer services.

Its high street competitors did not commit themselves to follow Barclays' lead, and consumer organisations gave the move only a cautious welcome, saying there was still much room for improvement.

The bank says it will give customers two days' grace if the account goes into the red by any amount. Previously it had charged pounds 15 for unauthorised overdrafts up to pounds 200, and pounds 30 for those over that amount. Customers will be subject to the same charges if they have an unauthorised overdraft for more than two days.

The reason Barclays gave for suspending charges was NOP research which indicated more than two in three people think banks put overdraft charges before customer service. The charges for unauthorised overdrafts are the single greatest cause of complaint, with almost one in five saying they would threaten to change their bank.

Its main competitors said there were no definite plans to follow Barclays' lead but that charges were constantly being reviewed. National Westminster, which charges a pounds 9 fee for unauthorised overdrafts plus pounds 3.50 a day for amounts over pounds 50, said that for a number of years local managers had discretion to waive charges.

A spokesman for the Consumers' Association said that it was "good that one of the larger banks was trying to reduce overdraft charges".