Consumer group Which? has made a complaint to the Office of Fair Trading (OFT) over Halifax’s current account, which claims to have a 0% overdraft even though it has a daily rate of at least £1.

The effective rate of interest at the government-owned bank soars the lower the overdraft — and works out at an annual percentage rate (APR) of a mammoth 365% for those who go just £100 overdrawn.

Currency brokers have also come under fire for advertising “commission-free” deals that can end up costing you more because exchange rates are so poor.

And consumers often fail to realise their 0% balance-transfer credit-card deal will charge interest if they exceed their credit limit or spend on the card.

Here, we uncover the truth about three “0% deals”.

OVERDRAFTS

More than 70% of people who slip into the red have an average overdraft of less than £500, according to the OFT.

Halifax Reward account holders receive a £5 bonus if they pay in at least £1,000 a month, but are hit with charges equivalent to 146% for a £250 overdraft or 49% for a £750 overdraft, based on the £1 a day fee.

Halifax says on its website: “As we charge fees on this account instead of interest, the typical rate is 0% AER \.” However, the bank charges £1 a day on overdrafts of up to £2,500 then £2 above that, then £5 a day if you exceed your agreed overdraft limit.

“This 0% AER is very misleading,” said Dominic Lindley at Which? “At £1 a day, a £250 overdraft is equivalent to 146% APR. It doesn’t seem very rewarding to us.” Lindley said this was the first instance of daily charges for authorised overdrafts. The consumer group believes Halifax is either in breach of advertising regulations or is exploiting a loophole by charging fees, rather than interest.

OFT regulations state financial firms must stipulate a typical APR on products that have “any fees or charges payable”.

A spokeswoman for Halifax said: “This account is the first to reward customers simply for using their bank account. No charge is made if an account is brought into credit by the end of the banking day.”

TRAVEL MONEY

Some 44% of people think “0% commission” foreign-exchange services offer a free service, a poll of 2,146 people by Opinium Research shows. However, research by currency broker FairFX shows opting for commission-free deals could cost an extra 14% due to poor exchange rates.

On the high street, for example, NatWest in effect charges 4.09% for those buying euros and 5.21% for dollars with either £200 or £400 sterling. American Express charges corresponding rates of 4.66% and 5.22%, while the Travelex desk at Birmingham airport in effect charges 11.62% when converting £400 to euros and 14.26% for dollars with the same sum, although a transaction of that size is “commission-free”.

Stephen Heath at FairFX, said: “People think they are paying ‘0% commission’, but that couldn’t be further from the truth.”

CREDIT CARDS

Consumers are lured into credit-card deals advertised as 0% — but hidden in the small print can be hefty charges. Barclaycard Gold and Post Office Classic Visa charge 0% on balance transfers for six and 12 months respectively, but both levy interest at 19.9% on purchases — more than two percentage points higher than the standard credit-card rate of 17.7%, said Moneyfacts.