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Overdraft penalties 'cut by 5%'

Overdraft charges levied in the UK are being cut, in the wake of the high court dispute between high street banks and the Office of Fair Trading (OFT).

The case, which was heard earlier this year and has yet to be resolved, concerns consumer complaints over the "excessive" penalties.

Hundreds of thousands contacted their banks to reclaim the charges last year, necessitating the High Court case to be called.

However, a new study shows that, even ahead of the verdict, the charges are lessening.

It found that interest rates for consumers going over their overdraft limits have dropped from 25 per cent to 20 per cent.

Currently, almost half of the 136 bank account providers surveyed charged over 25 per cent - with Ulster Bank topping the table at 30.5 per cent.

Nine others, including RBS, Halifax and Citibank, were also found to charge 29 per cent.

The research was carried out by MoneyExpert.

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