9 July 2016
In response to Which? research showing that unauthorised overdrafts can cost more than payday loans, Peter Tutton, Head of Policy at StepChange Debt Charity, said:
“This research is yet further evidence of the need for action to address the problem of unauthorised overdraft charges. Many of our clients, among whom overdrafts are the second most common form of debt, are trapped in a monthly cycle of overdraft debt just to make ends meet. The level of charges incurred can simply serve to deepen existing financial problems.
“We do not believe the Competition and Markets Authority’s (CMA) proposed remedies are sufficient to address consumer detriment caused by unauthorised overdrafts. Many of the banks already have monthly maximum charges and we believe that, as with payday loans, it is the Financial Conduct Authority (FCA) that should be responsible for setting the level of any charge cap on unauthorised overdrafts.”