Barclays bank has announced that it plans to conduct an unprecedented review of its overdraft fees and charges faced by 12 million of its current account customers. We answer five questions on the planned review.
What particular aspects will Barclays be looking at?
A key part of this new campaign will look at Barclays’ overdraft pricing.
The bank is already trialling a text alert service which alerts tens of thousands of customer when they are about to go into the red.
This service alone has cost the bank £1.5m in lost fees and is likely to be extended.
Why is Barclays conducting this review?
It is thought to be an attempt to improve its reputation after a being handed out a series of fines.
The bank has recently admitted it is likely to suffer a £50m fine for its Qatari bailout.
It was revealed recently that the bank failed to declare it paid £322 million to the Qataris for bailing the bank out in 2008.
It also said that it may have to compensate 300,000 personal loan customers who were given the wrong paperwork for five years.
The bank also came last in an ethical poll by campaigners Move Your Money, scoring just four out of 100 for its honesty and service.
How will the bank work out its new policy?
Earlier this month the bank launched a ‘Your Bank’ initiative asking customers to give honest feedback.
So far 250,000 people have got in touch.
A new overdraft policy will be worked out over the next 90 to 120 days.
How much does the bank currently charge its customers who go overdrawn?
It charges £88 for savers that persistently fall into an unauthorised overdraft during the month. However, the more common charge is £22 which usually occurs when a payment takes a customer into their unauthorized overdraft and another subsequent payment is made.
What has the Barclay’s Chief Executive said?
Speaking to The Telegraph, Ashok Vaswani, Barclays’ retail and business banking chief executive said: “I’m going through the business with a fine toothcomb. We want to de-risk the business and clean up any sins of the past.”
“The biggest one for me is overdrafts. I’m going to do a full grass roots review of our overdraft proposition. We know that this has been a problem which is why we have already launched the text alert systems in real time.
“I firmly believe that once a customer has been given the opportunity to save £22 they will say to themselves: “This bank is looking out for me”.