Barclays Slash Overdraft Penalties

Barclays have announced that they will reduce their overdraft charges to customers, as a result of new changes in their handling systems which has a greater reliance on more automated services.

The bank have announced that as from the 18th August 2008, their customers will pay just an £8 charge for a returned transaction due to insufficient funds in their account, which can currently be as much as £35 across many of the High Street banks.

Barclays have announced plans of a “Person Reserve” overdraft of approximately £250 which will replace current unauthorised overdrafts. Users can access this service without repeat charges, but failure to pay off the balance within 5 working days will result in a £22 charge. The alternative will see all payments over an agreed limit bounced and face the £8 charge.

This new fee is set to rubbish industry claims over the “true cost” of bounced payments, which are campaigners predict could be as little as £2.50. This April, the OFT (Office of Fair Trading) won a High Court ruling over the issue, when a judge said fees were subject to “unfair contract” rules.