New Rules Could Limit Scale of Bank Overdraft Charges
April 24, 2017
A new set of rules soon to come before the UK parliament could see banks forced to limit the scale of their overdraft charges.
The Labour MP Rachel Reeves is intending to present a bill before parliament on Tuesday April 25th that will give regulators at the Financial Conduct Authority (FCA) powers to limit the scale of overdraft fees.
Hopes are that the move will result in greater protections for the many tens of thousands of consumers throughout the UK who find their debt problems being made worse by charges linked to unauthorised overdraft use.
A precedent for such a move by regulators has already been set with the FCA having clamped down on payday lenders in recent years and legally limited the scale of their non-repayment charges.
The FCA has also recently made clear that it intends to further scrutinise the ways in which indebted people are being treated and handled by credit providers of all kinds, with the UK’s overall consumer debt burden currently rising consistently on a month by month basis.
Issues relating to overdraft fees and charges are now very much on the FCA’s agenda as it probes the industry, with Ms Reeves keen to see the regulator take strong action to protect vulnerable debtors from high overdraft charges.
“Banks are sending many people deeper into debt with extortionate charges on unauthorised overdrafts,” she told the Guardian.
“They should have a responsibility to help people out of debt, rather than adding to their problems with rip-off charges.”
In 2015, the FCA took action against companies operating with the payday lending industry and limited the scale of charges they could levy against their customers to 0.8 per cent of amounts initially borrowed.
These rule changes are widely regarded as having had a very significant impact on limiting the damage that payday loan companies can do to the finances of indebted individuals and households throughout the UK.
If you live anywhere in Scotland and you are struggling to cope with your personal debt problems then Scotland Debt Solutions can help. Contact any of our offices today to arrange a free and confidential consultation.
Citizens Advice has issued stern criticism of credit card companies for automatically increasing borrowing limits for customers who are already struggling with debt problems they can’t escape from. The charity’s own research has found that almost one in five people who are grappling with credit card debt problems have had their borrowing limits increased without […]
High factoring fees are placing an increasing financial strain on many property owners in Scotland, with some property factoring companies being criticised for huge price rises for what is often only essential basic maintenance and insurance. The purpose of a factor is to carry out ongoing maintenance, cleaning, and servicing of communal areas in property […]
Continuous payment authorities, or CPAs, are often used by payday loan providers as a way to take repayments via a debit card, or sometimes a credit card. A CPA effectively grants permission to take recurring payments, but it can be hard to revoke if you later experience financial difficulty and need to cancel the authority. […]
The car finance market is currently under investigation by regulators, as fears grow that it could become the next ‘debt bubble.’ The problem is that personal contract purchase (PCP) and hire purchase (HP) car financing agreements require little in the way of an initial deposit, and can be easily obtained by consumers posing a high […]
The latest figures on the use of food banks in Scotland show a disproportionately high need by Scottish residents in terms of population numbers, when compared with any other area of the UK. The Trussell Trust distributed 145,865 food parcels to Scottish residents in 2016/17 via their food banks, with almost 48,000 of those food […]
Because it’s highly addictive, gambling on even a small scale can turn into an addiction that takes over your life. The fact that it’s also easily accessible online now only serves to exacerbate this growing problem. So if you recognise that gambling has become an addiction, either for yourself, a friend, or a family member, […]