Hold on now, who’s saying my unofficial overdraft is an act of theft?

I was listening to my trusty transistor the other morning. That BBC Money Box programme is well worth a listen after you’ve been out hunting for some tasty worms. I do like Paul Lewis’s dulcet tones.

Anyway, there was one guy on from the banks talking about overdraft charges – especially when we all slip over the limit without asking. He made a few points that made me sit up and stop chewing my morsels for a moment. Mr Ian Mullen, from the British Bankers’ Association, said: “The banks believed the [overdraft charges] are fair, lawful and that it’s a transparent system.”

He said: “When dealing with overdraft charges, you are dealing with a credit risk, so therefore the risk profile changes if someone has gone over the limit without prior arrangement and that has to be reassessed,” said Mr Mullen.

Now I understand that if a bank actually charges a penalty more than the actual cost of the extra overdraft, then that is illegal. That’s why the OFT is looking into this, according to Lynn Parker, head of investigations.

“The bank charges cannot be disproportionate to the overdraft,” she said.

For instance, Halifax charges £39 an item if you have an unauthorised overdraft - and you can be stung three times a day for that – so that’s £117. Barclays’ rate is 9.9 per cent on authorised borrowing and a hefty 27.5 per cent on an unauthorised overdraft. The banks say they do this because it is against the rules of the account. But three times as much interest? That’s a bit heavy to me.

As one person on the radio pointed out, the credit profile has changed and the borrower is not keeping to the rules. Then came the crunch – this is like spending someone else’s money without their permission, which is theft. You know, I have never thought of it like this before – I don’t want to steal the bank’s money! I’m a law-abiding Mole. But there are times when I unwittingly go overdrawn – sometimes because the bank takes so long to clear my cheques.

So an unauthorised overdraft could be viewed as stealing. That changes the complexion of this issue, doesn’t it?

Talking someone else’s money without asking isn’t right. I don’t want to take anything that isn’t mine – but there are times when I’ve lost count of my bank account.

So what exactly is a fair charge? The problem, at the moment, is no-one really knows. The OFT wants to find out. And let’s hope they give us a definition which won’t put us all in clink for illegal borrowing.

Can the banks really justify such punitive amounts? I don’t really think so, but perhaps the banks and the OFT can agree how charges are triggered. The Mole will be watching this one!

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