Lloyds is ditching unplanned overdraft fees

 
Catherine Neilan
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Lloyds Bank has decided to scrap fees for unplanned overdrafts across the group, including Halifax and Bank of Scotland.

Around 20 million customers will no longer face fees for going over their overdraft limit from November, Lloyds said, although the bank may continue to block payments from the account until the overdraft is paid off.

Previously customers faced interest payments of 19.89 per cent, a daily charge of up to £10, a monthly charge of £6 and up to £30 a day for items that could not be paid for.

Lloyds said it would also simplify fees for planned overdrafts.Those with overdrafts of less than £500 are likely to pay less, while those borrowing more than £1000 are likely to see higher charges.

The move follows criticism of high charges by consumer groups and the Competition and Markets Authority (CMA) and comes just weeks before the FCA is expected to propose new measures on fees as part of an inquiry into high cost credit.

Lloyds said that it expected to make less money as a result of the changes, although it said fewer people now use an unauthorised facility than used to be the case.

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