This Policy Statement (PS19/25) sets out rules to make overdraft fees clearer and more transparent.
Why we have changed our rules
We want to improve transparency of overdraft pricing and fee structures for consumers.
This PS is part of an overall package of changes to reform the overdraft market and help consumers as well as improving competition amongst overdraft providers.
- requiring firms to publish overdraft pricing information alongside information on current accounts. This will allow for easier comparison between products in the market and will increase transparency of costs of an overdraft
- amending the definition of private bank
- exempting foreign currency accounts from our competition remedy rules
- making a small change to our rule on auto-enrolment for text message and push notification alerts
In addition, we welcome an industry agreement led by UK Finance which will help consumers by standardising the way firms show the cost of using an overdraft in pounds and pence.
Who should read this
- Current account providers that offer overdrafts and their trade bodies
- Consumers and consumer groups
- Third parties such as price comparison services and the media
The new rules on the publication of pricing information will come into force on 6 April 2020, in line with our overdraft pricing rules set out in PS19/16.
The revised definition of private bank in BCOBS 7 (Information about current account services) comes into force immediately.
BCOBS 8 (Tools for personal current account customers) comes into force on 18 December 2019. The revised Private Bank definition in BCOBS 8, the exclusion of currency accounts and the alerts automatic enrolment will all be effective from that date.