HSBC to outlaw £25 fee for bouncing transfers

11 November 2013

HSBC is to abolish the £25 fee it charges customers who bounce a cheque or a direct debit from their account, and is to consider changing its overdraft fees structure.

As part of its drive to "simplify products and reward long term relationships", the bank said the nine million HSBC and First Direct personal current account customers will no longer be charged a fee if the bank declines to pay a transaction due to insufficient funds.

The fee will be abolished from Sunday 24 November. However, any charges incurred up to that date will still be payable.

It also said it is reviewing how to introduce a "simpler and more straightforward" overdraft service and will make an announcement on it in 2014.

At the moment, HSBC charges a £25 unpaid transaction fee when customers' have insufficient funds in their account and the bank is unable to extend them any further credit to cover a payment.

Improved service

Brendan Cook, head of retail banking and wealth management for HSBC UK, said: "Removing the fee for unpaid transactions is the start of further improvements to our overdraft service. We are listening to our customers so the changes will make our service simpler and better reflect their needs."

The move will challenge HSBC's high street banking rivals. Lloyds Bank, for example, currently charges £10 for refusing a payment when there is not enough money in an account, while Nationwide charges £15 per failed transaction (capped at £75 per month).

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