Overdraft charge changes could lead to 'clouding'

The steps being taken by banks to bring down overdraft charges could serve to "cloud the customer’s understanding," according to one financial analyst.

Moneyfacts’ Lisa Taylor says Lloyds TSB’s plans to penalise those who persistently go over their overdraft limit rather than minor offenders could complicate matters for borrowers

She commented: "Current account fees are becoming more complicated and less transparent."

"While it is in the interest of consumers to see fees reduced, complicating the market and including ‘ifs buts and maybes’ into fee terms and conditions can only cloud the consumer’s understanding," Ms Taylor explained.

Highlighting the move taken by Lloyds TSB to send a text alert to savers who come within £50 of their limit she said it would only appeal to a "niche" of customers, but admitted the step was an "enhancement".

She warned that: "Many of these customers even with an alert, may not have the means to stay within their limit."

Meanwhile, it has emerged today that the Office of Fair Trading has revealed that banks are making £3.5 billion in overdraft charges.