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Lloyds Banking Simplifies Overdrafts For Personal Current Account Customers

Lloyds Banking Group plc (LLOY.L,LYG) announced a simplification of overdrafts for its personal current account customers. The new approach will be simple, clear and will give customers more control of their overdraft borrowing.

Lloyds Banking announced changes to make overdrafts simple and clear from November 2017. More than 9 in 10 personal current account customers of Lloyds Bank, Bank of Scotland and Halifax will be either better off or unaffected financially by the changes.

The Group has over 3 million basic bank accounts in products that charge a fee for missed payments. These fees will be removed from all basic bank accounts in November, Lloyds said.

From November, there will be a simple, single rate of 1p per day for every £7 of planned overdraft usage, clearly linking the amount charged to the amount and period of borrowing.

The bank noted that All fees and charges associated with unplanned overdrafts will be removed.

No more additional overdraft fees for missed payments, so customers will no longer be charged a returned item fee for having payments stopped due to lack of funds.

A daily fee will be charged at the end of each day of planned overdraft usage, avoiding cumulative fees being charged weeks later, helping customers to budget.

Customers who have given their mobile number to the Bank will automatically receive free text alerts, including low balance alerts, putting them in control of their budget.

With the new simple, single rate, a Lloyds Bank customer with the Classic current account who goes overdrawn by £100 within their planned limit for 10 days, will pay £1.40. Previously, they would have been charged £6.38.

A Halifax customer with a Reward current account, who goes overdrawn by £100 up to their planned limit of £100 for ten days, and is also unplanned by £50 for two of those days, will pay £1.40. Previously they would have been charged £18.00.

The average debit balance for a Lloyds Banking Group customer using their overdraft is typically around £450 a month.

by RTT Staff Writer

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