Many overdrafts are "complex and opaque", carry high charges, and are not good value for money, a regulator has concluded. The Financial Conduct Authority (FCA) said that "even the most astute consumer could struggle to understand what they are paying for" with an unarranged overdraft. An estimated £8bn is owed to banks and building societies through overdrafts. A banking trade body said overdraft charges had plummeted. The FCA will investigate the market over the summer.


Court battle

The regulator studied overdrafts that come as part of a current account, as well as unarranged overdrafts, where banks and building societies allow customers to go beyond their overdraft limit. It found that many people were confused about the costs and that overdrafts were not providing good value. "Just about everybody who banks can have access to some sort of overdraft facility - whether they have signed up for it or not," said Christopher Woolard, director of policy at the FCA......Read more here