The UK’s biggest high street banks provide the worst service to their customers and have a “long way to go” to stop unexpected fees and penalties, a new survey has found.

RBS, HSBC, NatWest, Barclays and Lloyds were the five lowest rated lenders in a new Which? customer survey. All of the big banks scored poorly for transparency of their charges and value for money.

Which? said confusing fees and penalties were a particular area of annoyance and remained a “mystery” to many people. The report accused banks of failing their customers by being unclear about costs of unauthorised overdrafts.

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In November, the Financial Conduct Authority announced it would investigate overdraft fees which can amount to more than the interest on payday loans.

Vicky Sheriff, director of campaigns at Which? Said: “If the banks aren't doing enough to ensure their penalty fees are fair, it is right that the regulator should step in.”

A spokeswoman for the British Bankers Association defended the industry’s performance, saying that lenders had invested “heavily” in digital technology to warn people when they might be about to be hit with fees. 

The BBA said the level of overdraft charges has fallen by £1bn a year and advised customers to speak to their bank to pre-arrange an overdraft to avoid being hit with unexpected fees.

Telephone bank First Direct, which is owned by HSBC, topped the Which? table with a satisfaction score of 85 per cent, while RBS came last, with 54 per cent.

The Which? survey evaluated how banks dealt with complaints, how clear charges and penalty fees are, how satisfied current account customers are with services received in branches and over the phone, as well as online and mobile banking.

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