New rules have been announced that block banks from sneakily charging you extra on your overdraft. The Financial Conduct Authority has today confirmed it will take steps to fix what it calls “a dysfunctional overdraft market”. The idea is to outright ban anything that makes it hard to compare charges, or that results in unexpected or unfair fees. FCA chief executive Andrew Bailey said: “The overdraft market is dysfunctional, causing significant consumer harm. “Vulnerable consumers are disproportionately hit by excessive charges for unarranged overdrafts, which are often ten times as high as fees for payday loans. “Consumers cannot meaningfully compare or work out the cost of borrowing as a result of complex and opaque charges, that are both a result of and driver of poor competition.” The changes they’re making To fix it they’re making the following rule changes: Stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts; Banning fixed fees for borrowing through an overdraft – calling an end to fixed daily or monthly charges, and fees for having an overdraft facility; Requiring banks and building societies to price overdrafts by a simple annual interest rate; Requiring banks and building societies to… Read full this story
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