The Coalition's Programme for Government promised 'We will introduce stronger consumer protections, including measures to end unfair bank and financial transaction charges.'

Yesterday Lloyds TSB announced that from 2nd December the 41-per-cent state-owned institution is going to introduce a new overdraft fee structure to its personal and existing current account customers. One of the bank's directors claimed, 'All customers who use an unplanned overdraft facility will pay less under the new structure,' and 'Almost 70 per cent of customers who use an unplanned overdraft will pay less than half what they currently pay.'

But what about responsible customers who only ever have cause to use their authorised overdraft facility? They will now be disproportionately penalised, incurring a £5 charge for each month that they go overdrawn, even if that is only for one day and only for, say, £10 or so (customers who slip into the red by up to £10 will not have to pay any charges).

In what way can this measure be called 'fair'? Those on low incomes who have occasional cash flow issues (for instance in months when there are five weeks between consequentive pay days) will undoubtedly be the people who are hit hardest by these revised fees, which increase the bank's effective APR by, say, 60 per cent on an overdraft of £100, or more than 100 per cent on borrowing of less than £60.

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