Overdraft fees can be as "eye-watering" as pay-day loans
High street banks charging more than pay-day lenders to borrow money
AN OVERDRAFT from a high street bank can cost more than a payday loan, according to the consumer group Which?
A Halifax overdraft of £100 for 31 days would cost £30, while some Santander accounts would charge £20, the research found. The same loan from Quickquid, Wonga or other similar companies would cost between £20 and £37.
Richard Lloyd, the executive director of Which?, told The Times that while the government and regulators have rightly focused on the payday lending scandal, "they must not lose sight of the urgent need to clean up the whole of the credit market".
He warned that "high-street bank overdraft fees can be as eye-watering as payday loans".
Campaign groups are calling on the government to do more to deter excessive charges and irresponsible lending across the credit market. Suggested measures include placing a cap on charges and the use of 'risk warnings' which clearly explain the consequences of missed payments to customers.
"People want and need clear, jargon-free information to help them make better financial decisions", said Russell Hamblin-Boone, chief executive of the Consumer Finance Association (CFA).
Halifax has issued a statement in response to the study, saying "Halifax offers a clear and simple overdraft charging structure, whereby customers are charged one daily fee rather than multiple fees".
According to the Scotsman, the entire consumer credit market, which is worth over £2 billion, is under investigation by the Competition Commission which is due to give its findings next year. ·