Citizens Advice response to Financial Conduct Authority announcement on overdrafts
The Financial Conduct Authority (FCA) has today announced that it will undertake work on arranged and unarranged overdrafts as part of a series of measures to improve competition in the current account market. This follows recommendations proposed by the Competition and Markets Authority (CMA) as part of its investigation into retail banking.
Citizens Advice Chief Executive, Gillian Guy, said:
“Overdraft charges can quickly add up to unmanageable debt.
“An unplanned expense that pushes someone into their overdraft by just a few pounds can lead to them being trapped in a cycle of daily charges. We helped people with 52,000 overdraft debt problems in the last year - in some cases people are paying more in overdraft charges than they would for a payday loan.
“It is good that the FCA has recognised more needs to be done to stop people getting into spirals of debt from unauthorised overdraft fees. Forcing banks to be transparent about these fees would be a step in the right direction, but it's important that the FCA now carefully considers how it could prevent banks from applying unreasonably high charges.”
Notes to editors
- The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
- Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.