By Bob Howard
Reporter, Radio 4's Money Box
HBOS is changing its overdraft charges
Radio 4's Money Box has learned that Halifax Bank of Scotland will make a small concession on new charges for authorised overdrafts.
Customers were due to be charged £1 a day if they went even 1p into the red, from 6 December.
HBOS has now said it will offer a buffer zone to allow customers to go overdrawn by up to £10 a month without being charged the daily fee.
The change from charging interest to a flat-rate fee has angered customers.
An HBOS spokesperson said: "We will be giving customers with arranged overdrafts a £10 buffer zone to help those who slip into the red by a small amount.
"This is a way of helping customers manage their money rather than something they should rely on at all times."
Radio 4's Money Box programme has calculated that anyone with an overdraft below £1872 is going to be worse off as a result of the introduction of fixed fees.
The move will affect all customers with an overdraft facility on their account except students.
At the moment customers pay a daily interest charge on their current account overdrafts.
The change will mean anyone with an authorized overdraft up to and including £2500 will pay £1 a day in overdraft fees. Those with overdrafts over £2500 will pay £2 a day.
Customers like Vikki Baker from Colchester will feel no benefit from the new buffer. She is up to her overdraft limit and with no job cannot repay the money she owes as she told Radio 4's Month Box programme:
"I will now be charged £31 a month instead of the £10-£15 interest I was being charged before. This will take me over my arranged limit, and it will end up costing £150 a month. I cannot afford this. What am I supposed to do?
Halifax customer Vickki Baker will not be helped by the new buffer
Customers must act
Martyn Hocking, editor of Which? magazine, said although the introduction of a buffer zone was a move in the right direction, customers had to demand much more:
"It's a small concession. More importantly it goes to show when customers act, when they threaten to change their bank, the bank will start to offer concessions."
This buffer zone could grow to £50 next week, £100 the week after, if customers continue to vote with their feet"
HBOS said those customers who would not be helped by the buffer zone had other possible solutions: "For those customers who use their overdraft on a more regular basis, and those that are near their agreed overdraft limit, we encourage them to contact us so that we can discuss their circumstances and see how we can help."