In an exclusive blog for MoneySavingExpert.com, the FCA says it has “significant doubts about whether unarranged overdrafts can continue as they are” and has announced it will look at whether fundamental changes are necessary as part of its review into high-cost credit. It has also said that the price cap on payday loans is staying put, which means people will never have to pay more than double what they originally borrowed.
Guy Anker, managing editor at MoneySavingExpert.com said: “It’s welcome news that the payday loans price cap will stay, and we’re happy to hear that the FCA is looking to extend its reach into bank charges. Payday loans should always be seen as a loan of last resort so whatever the price, those in debt should seek out other measures - such as getting debt help - before turning to these in a crisis.
“We may at last be hearing the death knell of charges for breaching overdraft limits. Lloyds - including Halifax & Bank of Scotland - has already announced a plan to scrap these charges. I hope others follow whether on their own accord or via regulatory action, as bank charges have long been a scourge. They're punitive, designed to be tough to repay, resulting in charges on charges leaving some owing £1,000s."
Chris Woolard, Executive Director of Strategy and Competition for the Financial Conduct Authority has written an exclusive blog on the announcement for MoneySavingExpert.com. View it here.
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