Overdraft fees

eskbanker

Given the suspicious similarity between the rates set by the main players, the FCA have asked each of them for details of exactly how they arrived at their new rate - they're not explicitly accusing anyone of anything yet but this would appear to show that they're unimpressed and are expecting answers, although their effectiveness as a regulator has been questioned before!  They're also looking for details of how the banks are dealing with those adversely affected....

Could you please provide:

• A summary of how you arrived at your new overdrafts rate(s). This should include:
o Which internal factors were considered in setting your new overdraft rate(s)
o Which external factors were considered in setting your new overdraft rate(s)
o How these factors were taken into account in setting your new overdraft rates
o A timeline of key decisions, particularly, any points where you substantively revised your rates
o A summary of decision-making executive meetings where setting your new overdrafts rate(s) has been discussed and, where available, minutes of those meetings. This should include attendance lists.
o Any pricing paper proposals that you put to your decision-making committee

• A summary of your approach to dealing with customers who will be worse off following your pricing changes and the measures you are taking to support them. We would like further information on the number of consumers who will be worse off due to a change in their overdraft rate and your strategy for communicating with them and supporting them to deal with this change.

https://www.fca.org.uk/publication/correspondence/overdraft-pricing-letter-firms.pdf