The Consumer Credit (EU Directive) Regulations 2010

Current account overdrafts

22.  After section 74A (information to be provided on a current account agreement), as inserted by regulation 19, insert—

“Information to be provided on significant overdrawing without prior arrangement

74B.— (1) Where—

(a) the holder of a current account overdraws on the account without a pre-arranged overdraft, or exceeds a pre-arranged overdraft limit, for a period exceeding one month,

(b) the amount of that overdraft or excess is significant throughout that period, and

(c) the account-holder has not been informed in writing of the matters mentioned in subsection (2) within that period,

the account-holder must be informed in writing of those matters without delay.

(2)   The matters referred to in subsection (1) are—

(a) the fact that the current account is overdrawn or the overdraft limit has been exceeded,

(b) the amount of that overdraft or excess,

(c) the rate of interest charged on it, and

(d) any other charges payable by the debtor in relation to it (including any penalties and any interest on those charges).

(3)   For the purposes of subsection (1)(b) the amount of the overdraft or excess is to be treated as significant if—

(a) the account-holder is liable to pay a charge for which he would not otherwise be liable,

(b) the overdraft or excess is likely to have an adverse effect on the debtor’s ability to receive further credit (including any effect on the information about the debtor held by a credit reference agency), or

(c) it otherwise appears significant, having regard to all the circumstances.

(4)   Where the overdraft or excess is secured on land, subsection (1)(a) is to be read as if the reference to one month were a reference to three months.”.