Today, Plum, the automated money management chatbot, has launched Fee Fighter, a free tool that enables users to check exactly what fees they are being charged by their banks.
The Fee Fighter tool uses Plum’s data partner TrueLayer, a secure FCA-authorised service, to gain read-only access to a user’s bank account. From there, Plum’s AI processes the description of each bank transaction to understand what type of a fee it is, and then allocates it to a specified category. When banks hide fees in the description of the transaction rather than listing it as a separate line in the bank statement, Plum extracts the fee from the description itself.
The release of Fee Fighter comes after the implementation of Open Banking, European-wide regulation that aims to encourage fair competition and comparison in banking. As well as alerting consumers to hidden fees, Plum is also helping users identify smarter deals and more cost effective products with alternative providers bespoke to their financial requirements.
To coincide with the launch of Fee Fighter, Plum has also released analysis of more than 11,000 UK personal current accounts (PCA) to reveal that the average holder was charged £152 in bank fees last year. If incurred by every one of the 65 million active current accounts in the UK, suggests banks made £9.9 billion from charges in 2017.
The average £152 paid per year by current account holders includes overdrafts, foreign exchange, and transactions fees, as well other unspecified fees, such as monthly account charges. This £152 average rises significantly when considering personal current accounts with an overdraft function. In this case, total bank charges were closer to £221 per current account holder with those that have at least 1 overdraft transaction per year.
In terms of what charges were applied by the banks, 56% were due to overdrafts, both from planned and unplanned usage. Foreign exchange fees accounted for 11% of the total charges, while late transaction fees made up 6%. Over a quarter, however, (27%) of the total charges were classed as “other” which included monthly account fee, unspecified bank fees, or bank subscriptions. Some of these charges can be fairly high, with an average of £5-£10 charged per bounced back transaction it is not uncommon for users to accumulate these charges without realising it, getting charges up to £75 in “Unpaid Transaction Fee”.
Victor Trokoudes, CEO and co-founder of Plum, said: “For too long, banks have been guarding customer data, and have been purposely vague about the true cost of overdrafts, borrowing, and FX. Now that Open Banking is a reality, people can see in real time what charges they are being asked to pay by the banks and therefore take control of their money to avoid paying them.
“Enabling people to take control is why we launched Plum and that’s why we’ve created Fee Fighter which, in less than five minutes, helps people find a better deal and avoid fees when it comes to banking. We want to help people stand-up to their banks and demand a competitive deal. The more people that switch, the more that banks will be forced to compete for their business and fight to retain loyal customers. This is just one of the ways that we’re helping people be better off.”
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