Banks in the UK have been criticised for charging their customers excessive interest on overdraft facilities.
According to recent research carried out by SG Hambros, the average customer with an unauthorised overdraft is being hit with 167 per cent interest per year, while some individuals could even be charged 3,650 per cent.
Despite many banks advertising overdraft rates of 19 per cent, the study revealed that this figure can increase to 32 per cent once additional charges have been added.
Business Secretary Vince Cable said banks are treating their customers unfairly, and are exploiting a lack of competition in the marketplace.
"Consumers have been ripped off, get a very bad deal, are affected very much by the complexity of a lot of financial transactions that are not transparent," he said.
Christine Ross, head of financial planning at SG Hambros, advised consumers to be absolutely clear on any hidden charges before signing up for an account.
"What we found is that unless individuals really scrutinise the small print the overdraft rates charged are far higher than they could even imagine," she said.
