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Could this be the clearest indication yet that banks have admitted defeat in the long running bank charges saga? In a surprise move, the taxpayer-owned RBS-Natwest group has announced it will be slashing charges related to overdrafts – breaking ranks with the rest of the banking industry.
With a decision on whether the Office of Fair Trading can regulate charges levied by banks on overdrafts and direct debits due to be delivered anytime, the move could be seen as the bank’s attempt to pre-empt any judgement and from 1st October, Royal Bank of Scotland (RBS) and NatWest customers will be charged only £5 for having a cheque bounced or direct debit returned unpaid; this is down from the current charge of £38. Meanwhile, the charge for paying an item on an overdrawn account falls from its current £30 to £15.
“This is obviously very welcome news and about time,” said Marc Gander of the Consumer Action Group. “Hopefully this is a recognition of how unfair their pricing system has been.”
If the Office of Fair Trading is successful in its ongoing legal battle with eight High Street banks – including RBS-NatWest – then banks and building societies would have to pay out billions of pounds in bank charge repayments to settle the 1.2 million cases currently being held in the legal system.
However, the decision by RBS-Natwest could be a clear signal that the banks are preparing for the worst and the move is sure to be welcomed by customers of both banks.
What’s more, such a move could well see other banks follow suit and cut their own charges in order to retain their customer base.