New overdraft rules mean seven out of ten people will be better off or see no change

Industry News | 22/01/20

Across the market, seven out of ten overdraft users will be better off or see no change, when new rules on overdrafts, introduced by the Financial Conduct Authority (FCA), come into force in April.

Around 14 million people use an unarranged overdraft each year, and all of these users will be better off or see no change. The FCA’s work highlighted that unarranged overdraft prices were regularly 10 times – and for some consumers as much as 20 times – as high as for payday loans. Customers at some large banks were charged effective arranged overdraft rates in excess of 80% per year once fees and charges are factored in.

Source: FCA