Arab Today, arab today uk banks charging as much as 800000 on overdrafts
Last Updated : GMT 08:08:24
Arab Today, arab today
Arab Today, arab today

UK banks charging as much as 800,000% on overdrafts

Arab Today, arab today

Arab Today, arab today UK banks charging as much as 800,000% on overdrafts

London - Arabstoday

Some High Street banks are charging \"eye-watering\" rates of interest when their customers go over their overdraft limit, research by Radio 4\'s Money Box programme has revealed.A customer borrowing £100 for 28 days without the consent of Santander would repay £200, for example.That is the equivalent annualised percentage rate, or APR, of 819,100%.Eric Leenders, from the British Banking Association, said that the industry was willing to look at concerns.But he said that using APRs to calculate the cost of unauthorised borrowing was a \"mathematical manipulation\" because the fees are representative of borrowing on an overdraft facility, not for borrowing the specific amount of money.Mike Dailly, from the Govan Law Centre, said the government must review unauthorised overdraft charges.\"What we\'ve got here is banks with equivalent APRs of nearly one million percent. It really is eye-watering.\"Comparisons between banks and so-called payday lenders showed that the annualised percentage rate charged for borrowing £100 over 28 days varied from 969% to 819,100%.No payday loan lender charged an APR of more than 5,000% but two banks - Santander and Lloyds TSB - charged an equivalent APR of more than 300,000%.Santander told the BBC: \"It\'s is confusing to compare payday loans with overdrafts on current accounts because an unauthorised overdraft charge is for unauthorised use of a current account while a payday loan is an agreed loan facility.\"Barclays would charge a customer using a personal reserve - a pre-agreed emergency borrowing facility - £22 for every five consecutive working days they were in it. This means customers would pay £88 on top of the £100 capital after 28 days - an equivalent APR of 366,000%Mr Dailly said the situation is worrying for consumers.\"The Romans 2,500 years ago managed to cap lending charges at 8%,\" he said.\"States in America have outlawed payday loans and effectively capped the cost of lending. These companies have come over to our country and they\'ve said they want to operate in our deprived communities because that\'s where their business is.\"Money Box has received a steady stream of emails from bank customers this year complaining about the level of charges.One of them, Marc Daffern, from Stamford, was told he had accrued £775 in charges for an unpaid direct debit of £6.99 from his bank, NatWest.He said: \"I was offered to be allowed to pay it off at the lower amount of around £400 but I wasn\'t willing to do so because as far as I\'m concerned I shouldn\'t owe them any of this money in the first place.\"NatWest said that it is investigating Mr Daffern\'s complaint.The payday loan market has expanded rapidly in the last decade.Lenders typically lend amounts up to £1,000 for up to a month. Applications are processed quickly and the borrower can typically receive the money the same day. But the quick availability of credit comes at a cost, typically an APR of around 2,000%.The Citizens Advice Bureau has said it is too easy to obtain such credit and has called for tighter regulation. But Consumer Minister Ed Davey believes that tougher measures could push people into the hands of illegal loan sharks.Last month, the Department for Business, Innovation and Skills (BIS) published a report on consumer credit.In the report, the BIS said that commitments made by High Street banks will \"deliver a fairer, more competitive market and mark a real improvement for consumers\".The BIS said that it is aware of an upsurge of concern regarding the rapid increase in the use of payday and other instant lending, and dialogue has already started with the industry on introducing enhanced consumer protection in their codes of practice.The Office of Fair Trading said the payday loan industry was worth about £115m in 2004. According to a report by consumers\' association Which? that figure was £1.9bn in 2010.The maximum charged for borrowing £100 for 28 days from a payday loan company is £42.That is compared to unauthorised borrowing charges of £100 with Santander, £88 with Barclays and £86 with Lloyds TSB for the same sum of money over the same period.Mr Leenders, from the BBA, told Money Box: \"There are better ways of covering short-term credit for small amounts. It may be more cost effective to arrange an overdraft or put the purchase on a credit card.\"In 2009, UK banks won a Supreme Court case that had been brought to challenge the legality of large overdraft charges.In explaining his ruling, the Supreme Court\'s president, Lord Phillips, said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the 1999 consumer contract regulations.But in the aftermath of the ruling, most banks did agree to reduce the level of their charges.However, although the charges have been reduced in some cases the number of times a customer can be charged in one month has gone up.The OFT said that under the Consumer Credit Regulations Act of 2010, businesses do not need to state an APR for \"any charges payable due to non-compliance with commitments contained in the consumer credit agreement\".

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today uk banks charging as much as 800000 on overdrafts Arab Today, arab today uk banks charging as much as 800000 on overdrafts

 



Arab Today, arab today
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 05:15 2017 Tuesday ,21 February

Omega 3 can reduce asthma cases

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday