Bank charges caused a surge in complaints to the FSA in the second half of last year, after a backlog built up during the Office of Fair Trading court case over supposedly unlawful charges.

More than two-million complaints were received in the second half of last year, according to figures from the Financial Services Authority.

These complaints had been put on hold in 2007 as the Office of Fair Trading entered a dispute with a number of major banks to try and set down some laws to regulate the high level of charges imposed on customers who exceeded their overdraft limit.

But in December, when the case was resolved with banks winning a surprise victory over the OFT, the complaints were finally pushed through.

The figure more than doubles from the same period in 2008 and shows a significant increase compared with the first half of 2009. As well as protests related to overdraft charges, the backlog also led to an increase in complaints about terms and disputed sums or charges and complaints about current accounts, which increased to more than half a million in six months.

But as banks won the right to charge, many of Britain’s biggest banks decided to recoup some additional income by raising interest rates on overdrafts.

Figures released by moneyfacts.co.uk show that Barclays alone are now charging as much as 19.30 per cent on some of their overdraft facilities. Norwich and Peterborough Building Society charges one of the highest rates at over 20 per cent.

Michelle Slade, spokesperson for Moneyfacts.co.uk says banks are likely to be making more now from these increases than they ever were from penalty charges: “Despite eventually winning the OFT case, banks made significant changes to the level of charges they will levy for unauthorised borrowing.

“Changes made to reduced unauthorised borrowing charges meant banks lost a significant revenue stream, something they can ill afford in the current climate. As one revenue stream closed inevitably they have moved to find another.”

Moneyfacts.co.uk has now urged customers to switch to a current account with a more competitive overdraft rate, saying it could save hundreds of pounds.

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