18 August 2008
Barclays is to scrap its current structure of unauthorised overdraft charges on current accounts and replace it with a new personal reserve scheme. The bank said the move will significantly reduce overdraft fees for the majority of its current account customers. Under the new scheme - which is introduced today - customers will be issued a personal reserve of between £150 and £1,500. If they exceed their agreed overdraft they will pay a one-off fee of £22 which will allow them to make unlimited transactions from their personal reserve for five days. Their payments will not bounce and they will not face any further charges. Commenting on the new system, Andy Harris, head of Current Accounts at Barclays, said: "We know from our research that customers appreciate the certainty, simplicity and transparency that personal reserve will bring." Some consumer groups have said they expect other banks to follow suit and offer similar overdraft services. The news comes after the Office of Fair Trading said banks make £2.6 billion a year from overdraft fees.
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