Bank acts as new payday rules come into force
RBS blocks £1 million in ‘hidden’ broker fees
The bank has been taking firmer action on brokers who charge commission for sharing information on customers and charging them for doing so.
Because these companies never explicitly said how customers’ information would be shared customers did not know they would be liable for charges until they were taken from their account.
RBS and NatWest revealed in November that they had been receiving in excess of 600 calls a day from customers caught out by unclear terms and conditions of payday loan brokers. Now more than 13,500 transactions have been blocked, an average of 260 a day and totalling more than £1.05 million in fees.
From today, according to new rules set by the Financial Conduct Authority, payday loan brokers must make clear the fees they charge and that they are not acting as a lender – or face being banned from charging customers.
Terry Lawson, Head of Fraud and Chargeback Operations at RBS and NatWest, said: “Our call volumes on these transactions have continued to fall, now down to around 100 calls a day, largely due to the work we have done in partnership with payment acquirers to get these practices stopped.
“The change in rules today presents another very positive step to protect customers from sharp practices and unexpected fees.”
Under the new rules borrowers will never pay back more in charges than the sum they borrowed. Interest and fees must not be greater than 0.8% of the loan, while default fees for borrowers who fail to repay on time will be capped at £15.
* According to a report in The Times today, the bank could face a fine of up of $5bn over toxic loans sold in the US. The fine would be much larger than the sum set aside by the bank.