Call for action on overdraft fees

Urgent action is needed to tackle “sky-high” unarranged overdraft fees, which can cost several times the amounts payday lenders are allowed to charge, according to Which?

The consumer group said that despite raising the alarm over the high costs which can come with unauthorised overdrafts in 2016, it is concerned that “not enough has been done to protect consumers from these sky-high fees”.

Which? said some unauthorised overdrafts can still cost around seven times more than a payday loan.

It compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount for the same length of time through a payday loan.

It said overall, 13 of the banks investigated charged more than a payday loan company, and some charged considerably more.