Ruth Mitchell

Banks ‘should decline payments’

Nearly half of consumers would like banks to block payments that would take them into unauthorised overdraft, a new survey has shown.

Around 46% of people said they would prefer banks not to process payments, if doing so took them into the red or breached their agreed overdraft limit, according to consumer group Which?.

38% of people said they would prefer banks to honour the payment and charge them.

The research comes after the Supreme Court ruled last week that unauthorised overdraft charges are not subject to regulation by the Office of Fair Trading under unfair contract rules.

The ruling means there is little hope that the millions of people who have paid the charges will be given refunds.

Which? called on the banks to make unauthorised overdrafts an optional service and to make their charges fairer.

Phil Jones, Which? personal finance campaigner, said: “Different people use their current accounts in different ways so banks shouldn’t adopt a one size fits all approach to overdraft charges.

“Many current account holders are effectively being lent money that they haven’t asked for and being charged through the nose for it.

“Such an expensive service shouldn’t be forced on people who don’t want it as it can easily lead to financial difficulty.

“We want banks to show they’re willing to respond to what their customers want by only making unauthorised overdrafts available to those who ask for them.”

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