Halifax slaps fees on overdrawn accounts: Society denies plans to raise revenue with other charges

THE 500,000 customers of Halifax Building Society's Maxim current account will face monthly fees on overdrawn accounts from next month.

Those with unauthorised overdrafts for the entire month will pay pounds 10 a month. There is no monthly charge for those who manage to get their account into the black for at least part of the month.

Those in the red pay pounds 10 for the month's first transaction and pounds 3 for subsequent payments. This replaces a uniform fee of pounds 10 per payment.

Those with authorised overdrafts will escape the pounds 5 fee if drawings are less than pounds 50. But overdrafts beyond this will incur the pounds 5 monthly fee. If the account goes beyond the agreed overdraft for the whole month, then the pounds 10 fee will apply.

Customers also pay interest of 17.5 per cent on authorised overdrafts and 28.9 per cent on unapproved ones.

The society denied that this was a prelude to fees on accounts in the black, which Abbey National has said it will introduce by the year-end.

'We have no plans to do that. We are not looking to raise revenue by these changes. We are making it fairer across the board for everyone,' a spokesman said.

Maxim customers only get a statement when they have made enough transactions to fill a page, although on average this is once a month. But the society will notify customers about any charges that will be made on the account in advance.

From this month National Westminster Bank started charging pounds 9 a month for agreed overdrafts and pounds 3.50 a day for overdrafts of more than pounds 50 without prior agreement.

Lloyds Bank allows customers to go pounds 100 into the red without incurring either charges or interest. Lloyds charges pounds 5 when the account is overdrawn by more than pounds 100 and pounds 5 every time the overdraft increases after that.

A spokesman pointed out that the chart based on figures supplied by Barclays Bank shows two increases in the overdraft, yet it is based on a constant pounds 150 overdraft. Barclays said charts showing customers continuously overdrawn are unrealistic as banks would not tolerate customers remaining overdrawn without authorisation for a long period.

----------------------------------------------------------------- COMPARISON OF OVERDRAFT CHARGES OF HALIFAX AND THE BIG FIVE BANKS ----------------------------------------------------------------- The figures are based on pounds 150 overdrawn for 10 days a month, with 10 debit entries each month on separate days ----------------------------------------------------------------- Total Usage fee Transaction Interest Monthly monthly Annual Account per month charges pa interest charges charges pounds pounds % pounds pounds pounds ----------------------------------------------------------------- AUTHORISED OVERDRAFTS ----------------------------------------------------------------- Halifax 5.00 Nil 17.5 0.67 5.67 69.04 68.04 Barclays Flexible 5.00 Nil 19.2 0.75 5.75 69.00 TSB Cheque 6.00 Nil 18.8 0.73 6.73 80.70 Lloyds Current Nil 6.00 19.5 0.75 6.75 81.00 Midland Current 7.00 Nil 17.4 0.68 7.68 92.10 NatWest Current 9.00 Nil 17.5 0.75 9.75 117.00 ----------------------------------------------------------------- UNAUTHORISED OVERDRAFTS ----------------------------------------------------------------- TSB Cheque 12.00 Nil 29.8 1.10 13.10 157.20 Barclays Flexible 15.00 Nil 29.8 1.13 16.13 193.50 Halifax Nil 16.00 28.9 1.06 17.06 204.72 Midland Current 17.00 Nil 31.8 1.16 18.16 217.92 Lloyds Current 15.00 6.00 26.8 1.00 22.00 264.00 NatWest Current 44.00 Nil 29.5 1.20 45.20 542.40 -----------------------------------------------------------------