Business as usual at HBOS & Lloyds TSB

Halifax and Bank of Scotland (HBOS) current account customers are facing a hike in overdraft charges from this December.

HBOS has confirmed it is moving all of its current account customers to a new daily overdraft charging structure. Agreed overdrafts of up to £2,500 will be charged £1 per day, with those over £2,500 charged £2 a day. All debit and credit interest will be removed, and unauthorised overdrafts will be charged at £5 per day.

GLC's Mike Dailly said: "HBOS claim this new structure is clear and easy to understand, and certainly for those customers who incur an agreed or unauthorised overdraft for a day or two the new charging structure will be cheaper".

"But in our experience most customers in short term financial difficulty are unable to reduce their unauthorised overdrafts quickly, so these changes are going to penalise the bank's most vulnerable customers. It many respects it's a case of 'business as usual' for HBOS and Lloyds TSB change, because that is what their current charging structures already do".

"The fact the UK taxpayer owns 43% of the Lloyds/HBOS group appears to count for little when it comes to treating bank customers fairly. Not all customers will be in a position to switch their accounts'.

As present HBOS charge a standard monthly fee of £28 for an unarranged overdraft, and £35 for paid and unpaid items, with a maximum of 3 charges per day. Under the new charging structure a customer, for example, with an agreed overdraft of £1,000 will be charged £31 per month for that service. However, if they go over their limit by £25, they would be charged £155 per month for their overdraft service. Under the current structure the comparative fee would be £63 plus interest.

Halifax and Bank of Scotland have about 10 million current account holders. The changes – which take effect from December 2009 – do not apply to student account, Easycash and Cardcash customers.