EXCESSIVE bank charges on customers who run up overdrafts without prior agreement and the total cost of hire-purchase goods should be limited, a House of Lords committee has recommended.
Excessive bank charges without prior agreement should be limited say Lords
Interest rates for “high-cost, short-term credit” (HCSTC), including payday loans, are now capped at 0.8 per cent a day.
But fees for unarranged current account overdrafts – where people are not prevented from paying out more money than they have or is agreed on their usual overdraft facility – are exempted.
It is clear that unarranged overdraft fees are unacceptably high
Although many major banks do already have self-imposed caps, peers heard households in chronic debt could still face £45-a-month charges for as many as six months out of 12.
The overdrafts are often triggered by regular payments such as utility bills, council tax or rent.