Dudley MP Ian Austin is backing a new campaign to clamp down on abuses in the credit market.
New figures from consumer champion Which? show that thousands of ordinary people have are being hit by sky-high penalties for going into authorised overdrafts.
Being in the red for just 31 days can hit you with a 30 or even 40 percent fee – the same rate as many payday loan companies. The rate for unauthorised overdrafts for the same period can be as high as 100 percent.
Austin supports proposals for a fair lending charter, and Which? has launched the Clean Up Credit Campaign, which calls on the Financial Conduct Authority to crack down on poor lending and unscrupulous practices across the whole market, from high-street loan sharks to international banks.
Austin, who has campaigned against payday loan rip offs in the past, said:
“I’ve been calling for payday loan shops to been driven from Dudley High Street for a long time, but we need to tackle sky-high penalties for going into overdrafts too.
“People have to take responsibility for their finances, but banks should lend responsibly too. Being charged 30 or 40 pounds for going just 100 pounds into an overdraft is ridiculous.”