Banks asked to clarify overdraft fees amid competition concern
Andrew Tyrie has written to the chief executives of the banks asking them to provide information about their paid and unpaid charges on both authorised and unauthorised overdrafts.
The move comes after Tyrie said the problems over price transparency and comparing products identified in the industry nearly two decades ago “remain as bad as ever”.
It also follows the recent Competition and Markets Authority analysis which revealed some customers, especially overdraft users, could get a better deal from their bank.
As a result of Tyries concern over the level of competition in banking, he’s asked the following banks to clarify caps on charges, daily charges, any other costs incurred by customers and what action they take if someone enters into an unauthorised overdraft:
- HSBC including First Direct and M&S
- Nationwide Building Society
- Metro Bank
- Tesco Bank
- Virgin Money
Tyrie said: “Consumers need to know what they are being charged for their bank accounts, especially their overdrafts. At the moment they often struggle to find out. So I have written to the banks in an effort to obtain some of this information and, in particular, to see what steps the banks take when a customer falls into an unarranged overdraft.
“The Cruickshank Report in 2000 identified problems with price transparency and the difficulty of comparing products. Almost two decades after this landmark report, these problems remain as bad as ever.”