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UK banks charged their customers £3bn for unauthorised overdrafts during the past , Which magazine has said.
The magazine accused High Street banks of levying "exorbitant" rates of interest, as high as 33% APR, on unauthorised overdrafts.

However, banks say that there are generous free authorised overdraft facilities in place.

One in four people told the magazine they had used an unauthorised overdraft in the past year.

Any charges we do levy reflect the extra cost of administering an account which is in overdraft

The magazine said the high proportion of people using unauthorised overdrafts suggested that consumers were being penalised for genuine mistakes rather than poor handling of their money.

"Unauthorised overdrafts are a gold mine for banks - the charges they levy are way out of proportion," said Martin Coles, editor of Which.

"It is especially unfair on customers who only occasionally run up a small unauthorised overdraft for a short time."

"We're calling on banks to stop punishing these customers by giving them a few days grace to pay back an unauthorised overdraft before charges are levied."

The magazine added that high interest rates and additional charges mean that unauthorised overdrafts are a "real money spinner" for banks.

Typical fees highlighted by the magazine include a £30 fee for bounced cheques and standing orders. Some banks charge unauthorised overdraft rates for the full amount overdrawn, even if part of the balance is within an agreed overdraft limit.

The magazine singled out NatWest, criticising the bank for charging customers a "contrived" unauthorised overdraft fee of 33.78% APR.

"Put simply, there is no need for customers to get into this situation. Arranging an overdraft is simple, straightforward and free," Ronan Kelleher, NatWest spokesman told BBC News Online.

"Any charges we do levy reflect the extra cost of administering an account which is in overdraft."

BBC News