More than 50% of banks' unarranged
overdraft fees came from just 1.5% of customers in 2016.
For nearly 10 years, the
Overdraft Rule has enabled consumers to make more and better-informed choices about
overdraft services.
The highest percentage of
overdraft income was reported by Southern Bancorp Bank of Arkadelphia, formed 30 years ago to provide services to lower-income and rural Arkansans.
More than 50 per cent of banks' unarranged
overdraft fees came from just 1.5 per cent of customers in 2016.
FCA chief executive Andrew Bailey said: "The
overdraft market is dysfunctional, causing significant consumer harm.
The UK financial services regulator said firms made GBP2.4 billion from
overdrafts alone in 2017, with around 30% of this coming from unarranged
overdrafts.
"Following our changes we expect the typical cost of borrowing [pounds sterling]100 through an unarranged
overdraft to drop from [pounds sterling]5 a day to less than 20 pence a day.
Andrew Bailey, the boss of the Financial Conduct Authority (FCA), told MPs yesterday that the regulator wants to bring the pricing of unarranged
overdrafts more in line with that of arranged
overdrafts to stop firms from charging higher prices.
Money managing director Jenni Allen said: "Finally, banks will no longer be able to charge rip-off unarranged
overdraft charges, which have long penalised their customers, many of whom can afford it the least."
As Steven Frances tweeted me: "@martinslewis Had a PS200
overdraft about 2 years ago, that crept to PS500, then PS1,000 within a year, its so easy for this to happen.
That's compared to customers with First Direct, who charge no interest or fees on
overdrafts up to PS250 - so a PS285
overdraft will cost just PS1.56 a year.
13 ( ANI ): Private banking major ICICI Bank on Tuesday announced the launch of an instant
overdraft facility for the Micro, Small and Medium Enterprises (MSME) customers in a completely online and paperless manner.
