Overdraft charges under consideration by FCA

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Overdraft charges under consideration by FCA

A ban on unarranged overdraft charges is being considered by the Financial Conduct Authority (FCA) according to the BBC.

“It (FCA) said the charges for those who go into the red without agreement can be high and complex. Earlier this month, the UK’s largest lender, Lloyds, said it was getting rid of unarranged overdraft fees altogether from November,” says the article.

“However, other banks charge about £6 a day, or up to £90 a month. “We believe there is a case to consider fundamental reform of unarranged overdrafts, and whether they should have a place in any modern banking market,” the FCA said, in its review into the high-cost credit market.”

FCA chief executive Andrew Bailey said: “Maintaining the status quo is not an option,” and that unarranged overdraft fees were often “significantly higher” than payday loans.

Read the full article here.

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