The Competition and Markets Authority (CMA) has introduced a new rule requiring banks to set up an alert system to notify its customers when they are about to go overdrawn.
A recent investigation by the CMA has revealed that banks received around £1.2bn a year from unarranged overdraft charges.
This new rule has already been adhered to by a number of banks which already have alert systems in place, but the rule requires all banks to send alerts via texts or a mobile banking app.
The alert system will apply to new customers and is expected to be introduced to existing customers soon.
“People will now be told when they are about to slip into overdraft, which could help them avoid potentially costly charges,” said Adam Land, senior director at the CMA.
“And the changes we are requiring from today make it easier for small firms to switch to another bank for their current account or to obtain a loan.
“These new rules – which are a result of our recent retail banking investigation – are part of a wider package that will help people to get the most out of their banks and force them to work harder for their customers' money.
“The overdraft alert system is one of four new measures that are being implemented today to improve the service people receive and make it easier to switch between different banks.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Monese urges holidaymakers to shop around for their bank to save money abroad
Brits travelling abroad have been encouraged to save money by shopping around for bank accounts...
Tandem introduces healthy balance feature
Digital bank Tandem has announced the launch of a new healthy balance notification feature on its banking app...
The Access Bank UK joins Bacs
The Access Bank UK has been announced as the latest brand to join Bacs Payment Schemes Limited (Bacs)...
Nearly 75,000 SMEs supported through BBB programmes
The British Business Bank (BBB) has reported that the total stock of finance provided through its programmes in the last financial year rose by 33% to £12.25bn...
Close Brothers’ banking division reports 6.6% loan book growth
Close Brothers Group PLC has revealed that its banking division has seen a 6.6% growth in its loan book in the 11 months to 30th June 2018...
Leeds introduces two-year fixed rate BTL product
Leeds Building Society has launched a two-year fixed rate buy-to-let (BTL) mortgage product as part of a wider refresh of its 70% LTV BTL range...
Just 20% of Brits would opt for a challenger bank
Only 20% of UK residents would opt for a challenger bank if they were opening a new account today, according to research from Equifax...
Santander to form digital investment banking team
Banco Santander has announced that a new digital investment banking team will be formed within Santander Corporate & Investment Banking...
Metro Bank introduces developer portal
Metro Bank has launched a new developer portal for FCA-registered third parties wishing to build services on top of its APIs...
Wesleyan Bank appoints new head
Wesleyan Bank has appointed David Brownbill (pictured above) as its new head of indirect sales...
Arbuthnot announces profit surge
Arbuthnot Banking Group has reported a half-yearly profit before tax of £3.5m for the six months to 30th June 2018, up from the £2.5m recorded during the same period last year...