Published On: Tue, Aug 1st, 2017

Financial Conduct Authority to crack down on charges for unarranged overdrafts

The review into high-cost credit found “concerns” and warned that “fundamental changes” in the way such bank overdrafts are provided are necessary. 

It said charges for unarranged overdrafts were often high and can be complex and difficult for consumers to understand. 

FCA chief executive Andrew Bailey said: “High-cost credit products remain a key focus for us because of the risks they pose to potentially vulnerable customers.

“We are pleased to see clear evidence of improvement in the payday lending market after a period when firms’ treatment of customers and their business models were often unacceptable.

“However, there is more that we can do, and this review is about identifying the areas where consumers may be suffering harm so that we can focus our efforts accordingly.

“In particular, the nature and extent of the problems that we have found with unarranged overdrafts mean that maintaining the status quo is not an option.

“We are now working to resolve these issues while preserving the parts of the market that consumers find useful.”

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