“Today’s announcement simply allows banks to continue to set their own level of exorbitant fees” – Which? response to the CMA’s Retail Banking Market Investigation Order 2017

Vickie Sheriff, Which? Director of Campaigns and Communications, said:
“Which? research has shown that punitive unarranged overdraft fees can be more expensive than some payday loans, and today’s announcement simply allows banks to continue to set their own level of exorbitant fees. The Financial Conduct Authority must now use its review of high-cost short-term credit to tackle these high charges, and protect those customers that have been identified as among the most vulnerable.”

Background

  • In July 2016, Which? compared the cost of borrowing £100 for 28 days and found that charges at some high street banks were as much as £90, up to four times higher than the maximum charges of £22.40 on a payday loan. The research assumed that the borrowing took place within a single bank monthly charging period. If usage of the unarranged overdraft began in one charging period and continued into the next then borrowing costs could be as high as double. Which? called on the regulator to tackle these fees. More detail is available – https://prod-wordpress-press.internal.which.co.uk/whichpressreleases/overdraft-charges-more-expensive-than-payday-loans/

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