After much media attention was given yesterday to increased use of payday loans and the extortionate charges they attract, Barclays Bank has today illustrated why many people shy away from using high street lenders.

Barclays is tripling the maximum daily charge for missed direct debit payments from basic bank accounts in the event of there being insufficient funds to cover the payment. Customer may be charged up to £24 instead of the current £8 if three missed payments occur in a day. Last month, RBS altered its basic bank account so that customers can only withdraw cash at RBS group’s cashpoints and not those of other banks.

Watchdog organisation Consumer Focus said: “There are over a million people without a bank account in the UK and others who avoid using their account fully often due to fears around charges. Those without a bank account pay more by not being able to use Direct Debit for household bills or access cheaper internet deals, find it difficult to access mainstream credit, insurance or to save effectively and increasingly will find it difficult to be paid for work.”

Under pressure from organisations such as Citizens Advice, most high street banks and building societies have made basic accounts more readily available over the past half-dozen years. These facilities are supposed to be on offer without need for credit checks – a feature that, when actually adhered to by frontline staff, provides poorer or indebted folk with a chance to establish a record of responsible use of banking products.

But a concerned Consumer Focus said: “These changes seem to be going against the Government’s aim to allow consumers to take advantage of better deals for example from paying by Direct Debit for energy.”

The watchdog is worried that higher charges and less accessibility mean the poorest pay the most and get the worst service from banking, believing that minimum standards for basic bank accounts must include:

• Ensuring all basic bank accounts do not place large fees on unpaid item charges
• Full link ATM access and Post Office access
• Free electronic payments and debit card functionality
• Buffer zones to cover small overdrafts

Of course, smart punters (poor or rich) could look into what local credit unions have to offer … and keep money working in their own communities instead of being siphoned or even frittered away …