A host of banks will change the way they process payments to offer customers some leeway when it comes to overdraft charges.
A snag in the current system allows banks to charge customers more than £25 for overdraft fees or bounced payments if debits are taken out of their bank accounts before funds are paid in.
Charges of this nature are thought to land banks £200 million a year from customers who have done nothing wrong other than suffering the misfortune of their credits and debits being processed in the wrong order.
The new City co-regulator, the Financial Conduct Authority (FCA), has pressured banks to make at least one repeat attempt to retrieve the payment before imposing a charge.
This should allow ample time for deposits on that day to clear before debits and standing order payments are made.
In a boost for consumers, Barclays, the Co-operative Bank, HSBC, Nationwide Building Society, RBS Group, Santander and National Australia Group, which owns Clydesdale and Yorkshire banks, have all agreed to adopt the changes.
To Clive Adamson, the FCA’s director of supervision, the agreement did not constitute new rules, but instead a way in which the industry could co-operate to improve the consumer experience of banking.
“This is a small adjustment, but one that will make a big difference”, he said.
Mr Adamson had suggested in January that the new regulator’s supervisory function would involve looking at problems through consumers’ eyes.
The ‘retry’ system is one of several initiatives that the regulator is considering in light of regular customer complaints.
"This is part of a wider focus by the FCA to ensure consumers get a better deal from everyday banking," Mr Adamson said.
Keith McDonald
Which4U Editor
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