Britain has highest fees in world for overdrafts

Published on Thursday 29 May 2008 00:55

THE UK's high street banks are charging the highest unauthorised overdraft fees anywhere in the world, The Scotsman can reveal.

Retail banks rake in a collective 3.5 billion a year through exceptional fees levied on items such as bounced cheques or breaching overdraft limits.

According to a report by financial consultants Cap Gemini, this makes up 52 per cent of their fee income, compared to Australian and Indian banks, which get similar levels of income from exceptional charges at 51 per cent and 43 per cent of fee income respectively.

Paul Pullinger, the head of retail banking for Cap Gemini Financial Services in the UK, estimates our high street banks glean exceptional charges profits of between 60 million and 100 million each per annum. He said: "Lots of people will be surprised at how big a percentage exception handling fees really are in the UK."

Mr Pullinger was in Edinburgh yesterday for the International Chartered Banker Conference, held in the Balmoral Hotel as part of Global Financial Services Week.

Meanwhile the number of complaints made to the Financial Ombudsman Service has risen by 30 per cent to its highest level on record, it emerged yesterday.