FCA research shows many consumers paying too much for overdrafts – Financial Conduct

[Legal Beagles]

The Financial Conduct Authority (FCA) has published research into the £8bn overdraft market a week after it took over responsibility for 50,000 consumer credit firms. The findings show overdrafts still aren’t providing good value, with many consumers confused about the costs. Christopher Woolard, director of policy, risk and research, at the FCA, says: “Just about […]

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[enaid]

Re: FCA research shows many consumers paying too much for overdrafts – Financial Cond

via FCA research shows many consumers paying too much for overdrafts – Financial Conduct Authority.

If they would have asked them that know, they would have not wasted so much time researching.
Comical bloody comical

[Amethyst]

Re: FCA research shows many consumers paying too much for overdrafts – Financial Cond

BBC Story up as well http://www.bbc.co.uk/news/business-2...medium=twitter

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.

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.

"The sheer size of this market is huge and with overdrafts bolted on to over 30 million UK current accounts, we want to make sure it is working well for consumers."

The regulator said that people failed to switch banks on the basis of overdrafts, so there was little pressure on banks to ensure these products offered good value.

It also said that it was too simplistic for banks to claim that overdrafts subsidise the fact that there is no specific charge to open a bank account.

Overdraft charges were the subject of a major court battle four years ago.

Banks defeated the Office of Fair Trading's attempt to regulate bank charges following the long-running legal case, but many have since made changes to their charging structures.

They also had to process millions of complaints about charges, with payments made to many thousands of customers.