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Pro-consumer group Which? wants to see an end to "complicated and exorbitant" overdraft charges for banking customers and has lambasted the new financial regulator, the Financial Conduct Authority (FCA), calling it the banks' "lapdog".

The strong words were prompted by its own research. It asked a group of consumers to work out how much a range of high street bank accounts would charge for an unauthorised overdraft, or bounced payments.

The task left the group stumped - they only managed to work out seven of the 48 examples correctly. One of the group was a PhD maths student. Either education really isn't what it used to be, or consumers are confused and unaware of how much they could be charged, as the fee structures are too complicated.

Banks either charge a 'simple' daily overdraft fee or interest on current accounts that are overdrawn with permission. Things become complicated when you consider additional fees for an 'unplanned' overdraft - an overdraft that hasn't been given the 'OK' by your bank - plus the interest, plus any penalties for bounced payments.

Overall it was found that there are vast differences in the ways different banks charge for an unauthorised overdraft - with some charging twice as much as others.

Which? is calling on the FCA to stop what it calls 'unfair' overdraft charges and make comparing bank account charges easier, to help consumers make informed choices. A noble cause, but Which? probably won't win any friends for calling the Watchdog a 'lapdog'!

The British Bankers' Association BBA responded in a statement: "Charges for unauthorised overdrafts can be avoided completely simply by keeping your account in credit or within an agreed overdraft facility.

"Most customers don't go into an unauthorised overdraft.  Those who do so regularly should consider asking for an overdraft limit or review the way they operate their account."

A spokesperson for thinkmoney commented: "The advice seems to be, if you manage your money well, there's no real need to ever use an unauthorised overdraft. However, life can sometimes get in the way and occasionally, accidents happen.

A spokesperson for thinkmoney commented: “The way many banks currently charge for things like missed payments and unauthorised overdrafts can be quite confusing, and a lot of people would benefit from knowing exactly how much they’ll pay each month.

"If you would like a bank account with no hidden charges that doesn't allow you to go overdrawn, so therefore avoiding penalties, and doesn't charge for bounced payments, thinkmoney may be suitable for you. For a single account, it costs £10 per month (or £15 per month for a joint account)." 

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