We share the results and lessons learned from our evaluation of our remedies for consumer harm found in the market for overdrafts.
Our investigation of the UK overdraft market is part of our High-cost Credit Review. This investigation identified high levels of consumer harm from high prices, complicated pricing structures, repeat overdraft use and low awareness and engagement among personal current account holders. Our analysis showed that harm in the form of high charges was disproportionately concentrated on vulnerable consumers.
To address these failures, in PS19/16, we introduced 2 packages of remedies. We aimed to reduce harm to consumers from high prices of arranged and unarranged overdrafts, the high incidence of charges on vulnerable consumers, and the cumulative cost of repeat overdraft use.
We have since carried out a post-implementation evaluation of these remedies. This paper and technical annex presents our methodology, results and lessons learned from this evaluation.
We welcome your views on this Evaluation Paper.
Please send your comments to [email protected] or Economics Department, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.