Which? targets sky-high overdraft costs

A new campaign has been launched by Which? aimed at persuading regulators to target high levels of fees and interest rates charged by some mainstream lenders.  The campaign is spotlighting overdrafts in particular, where, as we have pointed out in the past, interest rates can be as high as those of payday lenders.

Unauthorised bank overdrafts – where customers become overdrawn without having a formal overdraft agreement in place – often attract very high levels of interest.  But Which? has also highlighted that using an authorised overdraft can be just as expensive as a payday loan.

Proposed new regulations from the Financial Conduct Authority (FCA) do not cover these high penalty and default fees, either for payday lenders or other high-cost forms of credit such as overdrafts.

Now Which? has launched its “Clean Up Credit” campaign, aiming to persuade the FCA to crack down on what Which? describes as “poor lending and unscrupulous practices across the whole market”.

For more on this campaign, click here.