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Lloyds, Halifax and Bank of Scotland to charge up to 49.9% interest on overdrafts from April - MSE
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Lloyds, Halifax and Bank of Scotland will scrap daily fees for arranged overdrafts from April and instead charge an interest rate based on customers' credit history, with most set to pay 39.9% but some charged an eye-watering 49.9%. That's the highest rate we've seen from banks overhauling their overdraft fees - though most customers will actually pay less for their overdraft as a result of the changes...
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'Lloyds, Halifax and Bank of Scotland to charge up to 49.9% interest on overdrafts from April'

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'Lloyds, Halifax and Bank of Scotland to charge up to 49.9% interest on overdrafts from April'

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Replies
FCA: "OK, we agree, we have banned them."
Banks: "Well, we still need to make money, and overdrafts are one of the few things we charge current account holders for, and the whole settlement was that those who go overdrawn subsidise everyone else who gets banking for free, so we'll have to increase the rate of interest because we have nowhere else to go, unless everyone starts wanting banker's drafts for some reason."
MSE:
~~joosy jeezus~~
With their current overdraft charges equivalent to 84% pa.on the first £1,250 this announcement must be breaking their heart.
This lot are soooo greedy, they are likely to claw back the rest by reducing benefits on their accounts.
Shocked.
Should I change /get rid of my arranged overdraft?
Don't want to change account as a hassle.
But if getting rid of overdraft may consider, nervously, changing banks... But would hate to really.
Thanks
Kate
Nationwide have explicitly said that (where possible) they'll decline transactions to prevent customers from going overdrawn without an arrangement, but it remains to be seen whether others will adopt a similar approach.
Also worth noting that whatever Santander's position on overdrafts is, it can't be as simple as 39.9% interest for arranged and 0% interest for unarranged, because the whole point of the exercise is to harmonise interest rates so they're the same for both, even though other Ts & Cs may allow variation of total cost, such as capping.
Edit
There is a useful <table> issued by Santander so you can make comparisons for arranged overdraft fees before and after 6 April.
Don't really see it this way. They are allowing folk access to money (their overdraft) they don't have and potentially never will have at a rate that should put them off going into their overdraft.
It could certainly be argued that their pricing is predatory (albeit less so than the current structure) and I'm not convinced that it's tenable to represent it as if it was deliberately a deterrent....
Yes, they have been more aggressive as you say, but when it comes to current accounts (especially nowadays) it is easy to switch to another bank with lower fees charged on overdrafts. I also don't believe Lloyds allow for arranged overdrafts on their basic account? So I'm not sure I would say "predatory" as to me this implies preying on the weakest.
No basic accounts do, it's what makes them basic.
But those who are heavily indebted to LBG (or any other bank) are the least able to do anything about it, so I was challenging your contention that high charges can reasonably be seen as a deterrent, when in many cases they'll simply be exacerbating an existing problem.
Those who could flee the scene had already done so - leaving Lloyds with their own group of overdraft prisoners which they proceeded to royally screw for the time they had before the new regs would apply.
Yes, on that basis I would say that words like "predatory" and "aggressive" are pretty sober descriptions on the Lloyds Group.