The Financial Conduct Authority has today announced some wide ranging proposals to overhaul the overdraft market.
The key changes it is looking for are:
- Ensuring the price for each overdraft will be a simple, single interest rate – no fixed daily or monthly charges.
- Tackling the highest costs in the market by stopping firms from charging higher prices when customers use an unarranged overdraft.
- Banning fixed fees for borrowing through an overdraft.
- Mandating that arranged overdraft prices must be advertised in a standard way, including an APR to help customers compare them against other products.
- Digital eligibility tools that allow customers to check if they can get a cheaper overdraft with another provider.
- Overdraft charge calculators that help customers translate interest rates into pounds and pence.
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