THE Church of Scotland has lashed out at one of Britain's biggest banks over changes to its overdraft fees, accusing them of "hammering ordinary customers".
It has said that the poorest will be hit with inflated charges as a result of the new measures being introduced by HBOS, and that they were paying for the mistakes made by bankers that led to the credit crunch.
The bank, taken over by Lloyds TSB
during the financial crisis, has ditched the traditional system of calculating overdraft fees, under which customers are charged a percentage rate depending on how far they go into their overdraft.
Instead, from 6 December, customers with an authorised overdraft will pay £1 a day up to £2,500, after which they are charged £2, while those whose overdrafts are unauthorised will pay £5 per day.
The change will affect all customers with an overdraft facility, apart from students.
The Rev Ian Galloway, convener of the Kirk's Church and Society Council, wrote on his blog: "I was unimpressed to see HBOS have chosen to hammer ordinary customers with a radically increased overdraft fee.
"Is this once again the poor folk paying for the mistakes of the rich folk? Why is it always the little guy that gets hammered when the powerful screw up?
"No matter how they spin it, this is the thousands of ordinary customers paying through the nose for the excesses of a few who still don't seem to worry about how what they do affects others."
Consumer bodies have also attacked the change, saying that anyone who regularly uses their overdraft will see a big hike in charges.
Which? says that for anyone overdrawn by £100, a £1 a day charge is the equivalent of an interest rate of 365 per cent APR.
A spokesman for HBOS declined to comment on Mr Galloway's criticisms, but insisted the bank was responding to customer feedback to make the overdraft system clearer and simpler to understand. He also said it was not a revenue-generating change for the bank.
He said: "You know exactly what you're going to pay for exactly the number of days that you are in your arranged overdraft."
And he said: "In the majority of examples they (customers] could be better off." However, he did acknowledge that there would be customers who would find themselves charged more for their overdraft.
A spokesman for the Church and Society Council slammed the move as an "unsophisticated" flat tax.
He said: "This new system is like a flat tax. It's unsophisticated and it means that more ordinary customers will pay more fees in overdrafts.
"We did a big report at the Assembly about economic justice and the decisions that people in power make that affect those who are far away from them. This (the change in fees] is an indication of the continuation of that culture. They are going to make decisions that focus on the bottom line no matter what happens to ordinary people."
A Kirk source said Mr Galloway's words were likely to receive widespread support within the wider church.
