Andrew Tyrie blasts banks as they come clean on overdraft fees
Influential Tory backbencher Andrew Tyrie has blasted UK banks for their bewildering array of overdraft fees and charges and called for customers to be given more information about their accounts.
Tyrie, who chairs the Treasury Select Committee (TSC), also criticised recent proposals from the Competition and Markets Authority (CMA) to encourage customers to switch bank accounts. He was joined by fellow TSC member Labour MP Rachel Reeves in questioning whether the CMA's proposals will work.
After writing to all of the UK's major retail banks to ask them to disclose all of the associated fees, charges, penalties and interest rates they charge on both authorised and unauthorised overdrafts, Tyrie said: "The CMA's proposed remedies, which include a self-regulated maximum monthly charge, don't appear robust enough to deal with this serious problem."
Read more: Four things you need to know about the CMA retail banking investigation
Publishing the responses from the lenders – most of which run into multiple pages and highlight varying fee structures across different accounts and different overdraft amounts – Reeves added: "What these responses from the banks now show is just how complex and confusion the charge structures are for overdrafts.
"Customers don't stand a chance of being able to identify the best deal."
Most banks charged account holders some combination of a daily fee, interests and transaction fees for dipping into either authorised or unauthorised overdrafts. A survey earlier this year showed 85 per cent of bank customers would rather their bank didn't offer unauthorised overdrafts.
Summary of overdraft charges
| Bank | Fees |
| Barclays |
Authorised overdraft charges range from 75p to £5 per day depending on amount. No unauthorised overdrafts £8 failed transaction fee |
| Co-operative Bank |
£10 per day fee for unauthorised overdrafts, capped at £60 per quarter No failed transaction fee |
| HSBC |
£5 per day fee for unauthorised overdrafts, capped at £80 a month, plus interest on balance No failed transaction fee |
| Lloyds Bank |
£10 per day fee for unauthorised overdrafts over £25, capped at eight charges per month £10 charge for failed transactions, capped at three per day |
| M&S |
Interest payable on authorised overdrafts No failed transaction fee |
| Metrobank |
Interest payable on unauthorised overdrafts £10 failed transaction fee after being given until 2pm to top up account |
| Nationwide |
£5 per day charge for unauthorised overdrafts (on most accounts) £5 to £15 charge for failed transactions |
| RBS and Natwest |
£6 per day fee for unauthorised overdrafts, capped at £90 per month £6 unpaid transaction fee, capped at £60 per month |
| Santander |
£6 per day fee for unauthorised overdrafts, capped at £95 per month Most accounts do not get charged unpaid transaction fees |
| Tesco Bank |
Interest charged on unauthorised overdrafts £5 fee for every transaction when customer is in unauthorised overdraft, capped at £50 per month |
| TSB |
£10 daily fee for unauthorised overdrafts of more than £25 £10 failed transaction fee, capped at £30 per day |
| Virgin Money |
£25 monthly fee for unauthorised overdrafts £10 failed transaction fee, capped at £70 per month |
The long-awaited CMA report, published last month, focused on establishing an open banking framework where customers share their data with all banks. The idea is to encourage more transparency and focus banks on driving down charges to attract more customers.