The FCA published Policy Statement (PS19/25) on 2 October 2019 which sets out rules being put in place to make overdraft fees clearer and more transparent.
The rules will come into force on 6 April 2010 and are summarised below.
Firms who have more than 70,000 personal current accounts must publish the following information for each of its brands (for each period), for each current account product held by more than 5000 customers:
- the lowest and highest interest rates paid under authorised overdrafts
- the lowest and highest interest rates paid under unauthorised overdrafts
- details of the refused payment fee
- the lowest and highest APRs for an authorised overdraft included in their financial promotion
When publishing the information, the firm must:
- disregard interest rates payable by fewer than 1% of customers
- disregard any interest rates provided as a result of forbearance
- disregard any personally negotiated interest rates
- disregard any zero interest tranches
The rate of interest must be referenced as an “annual rate of interest” rather than EAR and the information must be displayed in the specified table form and on the same webpage as the firm’s complaints data.