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Global Analytics Responds to CMA Recommendations on Maximum Overdraft Fees PDF Print E-mail
Thursday, 11 August 2016
Global Analytics, one of the leading providers of low cost credit services enabled by financial technology, has responded to the conclusions of the CMA report released this week, which outlines that banks will have to set maximum monthly fees for unarranged overdrafts.  

The company expresses its concern that the CMA is not imposing a cap and instead allowing banks to cap their own monthly charges for unarranged overdrafts. It shares the disappointment felt by the consumer group ‘Which?’ that the measures will not be enough as banks will still be allowed to charge “exorbitant fees.” [1]

Chief Executive of Global Analytics, Chris deBoer says: “The model that we endorse as demonstrated by our Drafty product proves that it is possible for lenders to reduce the cost of credit and still operate a commercially viable product - something that we are passionate about. We believe that everyone should be able to access short-term funds without unnecessary and excessive costs.”

According to Which? the cost of borrowing £100 from some banks for 28 days amounts to as much as £90 in charges. The equivalent from Drafty costs just £5.04.

Chris explains: “We welcome the measures outlined by the CMA, but we also hope that by introducing ‘Drafty’, this product will now push other lenders, including the banks, to follow suit and bring down the cost of credit overall. Our goal is to create transparent, fair and responsible products for all consumers. Drafty is one innovation and more will follow.”

Here’s how Drafty works. Subject to affordability and eligibility checks, customers set a limit, and can draw cash up to that limit at any time. Money is usually transferred in minutes. Customers only pay interest on what they use – without any fees – and can save the rest as a safety net for later.

Global Analytics is leading the consumer credit market through constant innovation of its underwriting and customer offering. Global Analytics also counts Lending Stream as one of its group companies, which is a member of the Consumer Finance Association (CFA) and authorised by the Financial Conduct Authority.

Russell Hamblin Boone, Chief Executive of the CFA says: “The range of products available from the non-standard finance sector continues to grow. This is a reflection of the demand from people looking for convenient and flexible credit and the supply of innovative loans that are suited to modern, tech- savvy consumers. The use of technology and powerful data analytics has been crucial to providing this choice, while ensuring lending decisions are made responsibly.”
 
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