Responding to the FCA’s update on its work on high-cost credit including overdrafts, Eric Leenders, Managing Director, Personal Finance, UK Finance comments:
“Helping customers to manage their everyday finances is a priority for the banking industry and we acknowledge the FCA’s intention to make overdraft pricing simpler and easier to understand. The Personal Current Account market in the UK is highly competitive with over 40 different providers offering hundreds of competitive products. The Current Account Switching Service makes it easy for customers to move their account to get the best deal, with 5.1 million customers having already taken advantage of this service.
“We recognise the need to support all customers, including those in more vulnerable circumstances and banks provide 8 million free to use Basic Bank Accounts as part of this commitment. The industry also offers a range of measures to help customers better manage their money, including;
- Text alerts and prompts to help customers avoid unnecessary charges
- Retry periods for regular payments
- Fee free buffers for small overdrafts
- Packaged accounts with fee free borrowing, including Student accounts
- Mobile Banking to manage your money on the go
“It is important however that individuals are still able to use unarranged overdrafts where appropriate. UK Finance members have been working with the regulator to explore new ways to better identify and support customers with repeat overdraft use. We will consider today’s proposals carefully and continue to liaise with the FCA in the coming months.”
Notes to Editor
- UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms, our purpose is to champion a thriving industry acting always in the best interests of consumers, businesses and wider society.
- Retry Periods – When there is insufficient money in an account to pay a regular payment, customers will be contacted and given an opportunity to pay in during the same working day so that the payment can be made.
- Basic Bank Account – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/669114/HMT_Basic_bank_accounts_publication-2017_web_18_12_2017.pdf
- Moneyfacts currently lists 137 personal current accounts – https://moneyfacts.co.uk/bank-accounts/best-bank-accounts/
- Current Account Switching Data – https://www.bacs.co.uk/DocumentLibrary/CASS_dashboard_-_published_24_Oct_18.pdf