The City watchdog has ordered banks to do more to help the 19 million people who regularly use their overdrafts but has dismayed campaigners seeking a cap on the £2.3bn fees made when customers go into the red.
The Financial Conduct Authority’s 18 month review into high-cost credit stepped back from a cap on overdraft fees amid fears that it would be challenged in court by the banks.
Customers will instead be given more alerts via mobile phones, warning of charges as well as requiring the introduction of online tools to make the cost of overdrafts clearer.
Messages on cash machines that customers have “available funds” that include their overdraft will also be banned.
However the FCA said it would consider introducing a price cap on rent-to-own, where stores such as BrightHouse sell cookers and household appliances on weekly payments. It found that customers ended up paying more than £1,500 for cookers that sell in other high street shops for less than £300.
The price cap, estimated to benefit about 400,000 people, is likely to come into force next April after consultation with the industry.
For more read the full of article at The Guardian
