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Banks should cap overdraft fees, says competition watchdog
Banks should cap overdraft fees, says competition watchdog
This is a duplicate of the Blog Entry made on: 17th May 2016 17:59
This is a duplicate of the Blog Entry made on: 17th May 2016 17:59
Banks should cap unarranged overdraft fees and warn customers before they go overdrawn, the competition watchdog has said.
The Competition and Markets Authority says this and other measures could save bank customers £1bn over five years. The provisional conclusions of the 18-month study into personal and business banking suggest competition is weak in the industry. But consumer group Which? said the report was a missed opportunity. Many banks already cap overdraft fees, but the CMA said some do not. At one end of the scale, Barclays charges a maximum of £35 a month. At the other end, Halifax charges a maximum of £100. The average unauthorised overdraft fee - when the bank has not agreed to a customer going overdrawn - is £57.50 a month, according to Moneyfacts. At that average fee, if someone were to go overdrawn every month they could end up paying £690 a year. Interest is charged daily on top of that, at an average annual rate of 12.85%.....Read more here
The Competition and Markets Authority says this and other measures could save bank customers £1bn over five years. The provisional conclusions of the 18-month study into personal and business banking suggest competition is weak in the industry. But consumer group Which? said the report was a missed opportunity. Many banks already cap overdraft fees, but the CMA said some do not. At one end of the scale, Barclays charges a maximum of £35 a month. At the other end, Halifax charges a maximum of £100. The average unauthorised overdraft fee - when the bank has not agreed to a customer going overdrawn - is £57.50 a month, according to Moneyfacts. At that average fee, if someone were to go overdrawn every month they could end up paying £690 a year. Interest is charged daily on top of that, at an average annual rate of 12.85%.....Read more here