The appeal by the banks against the penalty charges ruling concerned a few of you.
But now there has been some good news!
This is because Barclays Bank says it will cut its penalty charges before the courts decide whether to the force banks to make cuts.
It is dropping its bounced payment charges from £35 to £8 and offering a buffer zone averaging £250.
If you stray into this zone, you will be charged a flat £22 for any five day period but you avoid the bounced payment charges. Go beyond it and you face up to five penalty charges a day, costing a total of £40.
The change, which takes effect in August, comes as 8 banks prepare to defend the fairness of their bank penalty charges in the high-profile High Court case.
Marc Gander, of the Consumer Action Group, gave the cut in charges a cautious welcome saying:
It vindicates our stance that the charges have been wildly excessive. It shows that for years they have been milking their customers for nearly £30 more than they needed."
But Andrew Hagger, of comparison firm Moneynet.co.uk, says:
"It is preempting what might happen after the court decision but it is a move in the right direction."
Claim back your bank penalty charges
The revamped current accounts are aimed at appeasing those of you who get hit with large penalty charges when you occasionally or accidentally go into the red.
From 18 August, the bank is launching its "Personal Reserves"; a buffer zone of about £250 which will be an authorised overdraft for five days.
All 11 million of you with a Barclay's current account will be told in advance of the new Personal Reserve for £22 for each five days you use it. You will not pay any additional interest payments.
If you go beyond this limit, (whether you choose the buffer or not), you will be charged £8 for each unauthorised payment you make while in the red; up to a maximum of £40 per day.
Currently, bounced payments prompt a charge of £35 a day. Guaranteed payments are charged £30 (up to a limit of £90 a month).
BARCLAYS' CURRENT OVERDRAFT CHARGES
- £30 for each guaranteed but unauthorised payment (up to three a month)
- £35 per day for bounced payments above overdraft limit
- 27.5% interest rate when paying back each unauthorised payment
BARCLAYS' NEW OVERDRAFT CHARGES
- £22 for each five-day use of the Personal Reserve
- £8 for each guaranteed but unauthorised payment
- £8 per day for each bounced payments above overdraft limit (up to five per day)
"If customers continue to run their accounts as they are now, we will earn less money than before from overdraft charges," said a Barclays spokeswoman.
If you are customer with a basic account or poor credit history, then you are excluded from the buffer zone deal.
Those of you potentially facing bigger bills from these new charges are those of you using the new buffer zone that have previously never exceeded your overdraft limit, and those of you making more than four unauthorised payments a day.
Barclays said that you would receive more advice about moving to a more suitable account if you repeatedly trigger the five-day Personal Reserve, at a cost of £22 each time.
The Office of Fair Trading (OFT) estimates that the banks make £3.5 billion a year in unauthorised overdraft charges. In 2007, Barclays paid out £116 million to those of who claimed back your penalty charges from them.
Peter Vicary-Smith, chief executive of consumer association Which?, said he hoped other banks would follow Barclays' lead, saying:
"We've long said that people want simple and transparent banking and Barclays is going in the right direction. We welcome the reduction in unauthorised overdraft charges and a simplification for customers. It would have addressed a lot of customers' problems if this had happened years ago. We are pleased to hear Barclays' commitment to fee-free current accounts, and hope that other banks will follow their lead."
The question is, will other banks follow suit and drop their penalty charges to a more acceptable level?Also, are Barclays new charges fair or should they be even lower? (considering the true cost is more like £2 an item)
Better yet, should we all still wait and see what happens next in the High Court case?
Why not let us know what you think in the comments?
Related Stories
Bank penalty charges verdict
Claim back your bank penalty charges
Claim back your credit card fees
Claim back your mortgage exit fees
Claim back your Payment Protection Insurance