11 September 2007
Lloyds TSB has announced it is to cut its fees for unauthorised overdrafts, as the debate surrounding bank charges continues.
The bank will cut its interest rates for unauthorised borrowing by around a third, while bounced cheques and charges for going into the red will also be cut from November 2nd.
Current £30 daily fees for going into the red will be replaced with a charge of £15 a month and then between £6 and £20 a day on a sliding scale dependent on the customer's overdraft size.
While Lloyds TSB is the first bank to announce reductions in charges, analysts are now predicting that many banks will follow suit.
"We want to help our customers avoid accidentally slipping into the red and are giving them the tools to do just that," Ian Larkin of Lloyds TSB said.
"We understand that it can sometimes be difficult for customers to keep tabs on their account and we want to make it easier," he added.
Lloyds TSB returned £36 million to customers to settle overdraft claims in the first six months of 2007. In total UK banks and building societies have paid back an estimated £570 million to customers in the same period.
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