Two thirds of current account holders are in the dark about whether they can switch accounts if they are overdrawn, according to new research.
Research from uSwitch.com, the price comparison site, found that people do not switch accounts as they are unsure about whether they are able to make the change when overdrawn, despite a push from the Current Account Switch Service (CASS) encouraging more people to switch.
The data found that seven out of 10 UK current account customers have access to an arranged overdraft and on average go £266 overdrawn a month.
Tashema Jackson, money expert at uSwitch.com, said “Millions rely on their overdraft every month just to make ends meet. Yet they’re not only being stung by high charges and fees, but many also feel like they’re not eligible to switch to a better deal. With some accounts charging nearly three times more than others for an arranged overdraft, customers should be able to simply compare all the options so they’re not paying over the odds."
Despite overdrafts being essential for many people, 14 per cent of consumers switching accounts are given a smaller overdraft and face a possible financial shortfall, uSwitch also found.
The Competition and Markets Authority (CMA) has already said that overdraft users are less likely to switch account than other customers and that the heaviest overdraft users stand to save up to £260 by switching to a different provider
“While the CMA has said it will take a tough stance on capping unarranged overdraft fees, it’s doing little to help overdraft prisoners who feel trapped and unable to switch. We’re calling on the banks to assure people that if they do switch their current account, they won’t be left high and dry by an overdraft that doesn’t meet their needs," Jackson added.