Overdraft opt out proposals are 'a good idea'

Allowing consumers to opt out of overdraft facilities is a good way to encourage people to improve their credit score, it has been claimed.

Brits that do not pay much attention to their bank balance are likely to benefit the most from such a proposal, according to Moneynet.co.uk.

These comments were in response to new plans to introduce an opt out for being granted unarranged overdraft facilities unveiled by the Office of Fair Trading, which has held discussions with major personal current account providers.

The regulator is also keen to make more tools available for customers to control their bank balance and is hopeful changes will be introduced across the market over the next two years.

Spokesperson for the price comparison site Andrew Hagger explained: "What happens is the bank gives them leeway and before they know it they may be £200 to £300 overdrawn with additional costs and interest or fees.

"If people are a little bit wary of that situation then I think it is good for them."

Posted by Martin Peacock