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Millions of Halifax customers with current accounts have seen their debt management worries eased as the highstreet lender agrees to cut penalties when they go overdrawn.

This has prompted speculation that lenders are coming under growing pressure to lower their charges before a ruling next month by the new Supreme Court.

A test case has been trialled involving the Office of Fair Trading and eight high street lenders with regards the over-charging of fees and penalties in relation to exceeding overdraft limits.

Debt help organisations have welcomed the trial, where it is widely anticipated that the charges will be deemed unfair – meaning millions of people facing debt problems as a result of the charges levied may receive a full refund.

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “Many people that enquire about debt management have exceeded their overdraft limits and then struggled to keep on top of the subsequent charges associated with this.

“Customers who have developed debt problems as a result of the excess charges will be able to reclaim their money if the courts rule in their favour. In the meantime we always recommend people struggling with their finances to seek impartial debt advice, as it’s unlikely any payout will be swift.”

If the charges are deemed unfair by judges, the amount to be refunded by banks and building societies would be in the region of around £1 billion of excess charges.

RBS Group, also said it would be cutting its unauthorised overdraft penalties earlier this month. Fees for bouncing returned cheques and standing orders are being chopped from £38 to £5 while the monthly charge for unauthorised overdrafts is going down from £28 to £20 at the group, which currently has around 12.5 million customers.

Reports suggest that the Treasury is using its stakes in RBS and Halifax (whose parent company is Llyods) to influence their policies.

However a spokesman for the bank said: “We have publicly issued a call for the the OFT and all the banks, not just those with a Government stake, to resolve the charging situation as soon as possible.”

Halifax ease debt management issues by cutting overdraft penalties is a post from: Delta Debt Management & IVA Advice