The Office of Fair Trading (OFT) has come out with a recommendation that Banks should begin to offer current accounts that give their customers the option to opt out of an overdraft facility, rather than having one as standard. It considers this to be an important factor in many individual’s slide into debt. Rather than viewing this facility as an emergency resource to help them manage their direct debits and other outgoings, many enter the red with the best of intentions but fail to bounce back out again. In fact, 1 in every 10 people in the UK is permanently overdrawn and accruing the extra bank charges that go with it. A further 12% depend on their overdraft facility at least 5 times in the year and half of us need to use it at least once. So, there is no denying that it can be a valuable resource but it can also be a costly contributor to your debt problem.

The OFT are also keen to see a reassessment of the fees and bank charges that consumers face for their unarranged overdraft. These charges are gradually coming down though. For example, a bounced payment, when you don’t have the funds in your account to cover an expense, used to cost a further £34 on average, now it’s down to about £17. However, some have accused the OFT of taking too soft a stance on bank charges and not doing enough to safeguard consumer interest.
In response to these claims, the OFT reiterated their view that continued monitoring of personal current accounts is effecting significant change in bank’s practice and in the market as a whole. The industry is suffering from rock-bottom consumer confidence in the wake of the recession and is therefore committed to change.

The Office of Fair Trading have outlined a clear goal; a current account market where banks make the necessary information available to customers at the right time. Therefore, making it easier for people to control their finances. Solving the problem of mounting debt hinges on getting your personal finances under control. It highlights how important it is for the individual account holder to use this information to manage their account carefully and even take it to another bank if there’s a better deal to be had.

If you are struggling to repay your unsecured debt, a debt management plan can help you to take control of your finances and allow you to repay your debt with a reduced monthly payment which is affordable to you. Drawing up a detailed budget can help you to recognise the areas where you can cut back too. It’s a good idea to talk to a debt management specialist who has the experience to guide you through the process. Visit for more information.