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What the fuck?


Looks like the Daily Mail can't do simple mathematics.

They say that for a £200 unauthorised overdraft, the APR is 46,450,869%.

Logically therefore, the annual charges on that would be £200 multiplied by that amount, ergo £92.9m. They do say "An APR shows the full cost of borrowing if the pattern continued for a full year" after all. How many customers exactly do you think end up with accounts in that much debt? The answer is zero.

They arrive at this figure by determining that over ten days, your £200 unauthorised overdraft attracts fees of £85 (which stem from a daily charge of £10 per day).

So some bright spark (read: f'king idiot) has figured "Okay, so over ten days, your balance increases by 42%, so what if that happened every ten days for a year?"

Which would be fine, if that's how it worked, but it's a daily flat charge of £10, you cannot compound it. In APR terms, you would be potentially charged £10 per day, so over a year let's call that £3,600, which is an "APR" (in as much as that applies here) in the region of 1,800%. Okay, so that's not ideal, as far as fees go, but is 20,000 times less than the figure in the Daily Mail's headline.

Now, I don't know if James Coney is an innumerate fuckwit with a limited grasp of banking mechanics, or if he has some poorly qualified lackey doing this job for him without the oversight of somebody who actually comprehends numbers, but either way at least I can take comfort that they work for the right newspaper. The Daily Mail is exactly the sort of organisation who would look at a calculation that looks outrageously high, and instead of sense-checking it on account of it looking a bit wrong, would instead put it into their headline. Good job!!