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Will the Irish Central Bank follow the UK’s lead on Overcharging

These changes would provide greater protection for the millions of people who use an overdraft financial difficulty, particularly the most vulnerable. Visit here: https://bit.ly/2RmCbkP

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Will the Irish Central Bank follow the UK’s lead on Overcharging

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  1. Will the Irish Central Bank follow the UK’s lead on Overcharging

  2. Banks are to be banned from charging excessive fees for unauthorised overdrafts as part of the UK’s Financial Conduct Authority clampdown on the “dysfunctional” high-cost credit sector. (Financial Times Dec 2018) In what the Financial Conduct Authority described as the biggest intervention in the overdraft market for a generation, it is proposing a simple, single interest rate for each overdraft with no fixed daily or monthly charges.

  3. Last year, firms made more than £2.4bn from overdrafts, with about 30% from unarranged overdrafts, the watchdog said. More than half the unauthorised overdraft fees came from 1.5% of customers in 2016, with people living in deprived areas most affected. In some cases, these fees can be more than 10 times as high as charges for payday loans. The watchdog will not set a monthly price cap, arguing it could have unintended consequences, but expects prices to fall as a result of competition from more transparent costs.

  4. The FCA says that arranged overdraft prices must be advertised in a standard way, including an APR to help customers compare them; and refused payment fees should “reasonably correspond to the costs of refusing payments” and must be explained. The FCA also told banks to do more to identify customers who are in financial difficulty and to help them reduce their overdraft use – without announcing specific measures.

  5. Following a consultation in May, the watchdog has already ordered firms to provide online tools that allow customers to check if they can get a cheaper overdraft elsewhere, along with calculators that translate interest rates into pounds and pence. It has also asked for mobile phone alerts and changes to how overdrawn balances are displayed at cash machines.

  6. The FCA chief executive, Andrew Bailey, said: “These changes would provide greater protection for the millions of people who use an overdraft, particularly the most vulnerable. It is clear to us that the way banks manage and charge for overdrafts needed fundamental reform. “We are proposing a series of radical changes to simplify the way banks charge for overdrafts and tackle high charging for unarranged overdrafts. These changes would make overdrafts simpler, fairer, and easier to manage.”

  7. Contact us- Loan Analysis Solutions Locations : Naas, Kildare, Ireland Email : contact@loananalysissolutions.ie Website : www.loananalysissolutions.ie

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