Lloyds Banking Group has been slammed by labour MP Rachel Reeves, who also chairs the Business, Energy and Industrial Strategy Select Committee (BEISSC), for trying to “game the system” with its new overdaft fees.
Reeves said the upcoming changes that Lloyds are introducing would increase fees for the majority of customers and went against the spirit of recent recommendations from the Financial Conduct Authority (FCA).
City A.M. reported that Reeves said: “It appears these changes at Lloyds will increase the charges for the vast majority of customers with overdrafts.
“While these fees might be legal, they are not with in the spirit of the FCA’s recommendations. It is unacceptable for financial institutions to try to game the system at the expense of customers, particularly those struggling with their finances.
“We need further action from banks and the regulators on the exorbitant fees charged on overdrafts. Lloyds should rethink these fees as a matter of urgency. We need an end to the excessive fees that continue to harm borrowers particularly those with persistent money problems.”
The bank is due to begin transferring customers to a new tariff today, which will see charges for those borrowing less than £4,100 to increase.
Speaking to City A.M. a Lloyds spokesperson said it was the first bank to remove fees for unplanned overdrafts, while welcoming the plans from the FCA.
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