Bank customers ripped off by “extortionate” overdraft fees will get support next week from a parliamentary bill that promises to protect the most financially vulnerable from escalating charges. Rachel Reeves, a Labour MP who sits on the Treasury select committee, will outline plans on Tuesday for regulators at the Financial Conduct Authority (FCA) to cap the maximum amount that banks can charge customers for unauthorised overdrafts, similar to the limit imposed on charges on payday loans of £24 a month. She argued: “Banks are sending many people deeper into debt with extortionate charges on unauthorised overdrafts. They should have a responsibility to help people out of debt, rather than adding to their problems with rip-off charges.” The FCA, the City watchdog, has included overdraft fees in a review into high interest loans, alongside payday loans and doorstep lending. It launched the review after the Competition and Markets Authority stepped back from imposing a cap on overdraft fees following its two-year investigation into high street banks. The CMA said instead banks should publish their monthly maximum charge for going over the limit. Two years ago, the FCA capped maximum charges on payday loans at 0.8% a day of the amount borrowed…. Read full this story
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