Everytime one of the 28 million people in the UK with an overdraft go over their agreed limit, they are subject to bank charges often in excess of £25.
If there are any direct debits or standing orders due whilst the account in question is over its limit, the customer will be smacked with a further charge, again about £25.
The banks justify this as an administrative charge however the OFT have pointed out that the charges the big banks are handing out aren't a true reflecting of the cost to the banks for handling the default.
Consumer groups are calling these charges illegal and are urging customers to attempt to claim them back from the banks. Many people have tried, and many with success, with payouts of over £1000 common.
The "Reclaim Your Money" guide to Claiming Illegal Bank Charges and Fees is a good place to start if you feel you have been unfairly charged.
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