Customers are being charged by some major banks over 10 times the fees of payday lenders to borrow money, an investigation claims.
Consumer group Which? reported that some banks charge significantly higher fees when people slip into unarranged overdrafts than the amount payday lenders are capped at charging by the Financial Conduct Authority
Which? found that in some cases consumers could be charged over 12 times more by major high street banks for borrowing as little as £100 for 28 days.
During the investigation, Which? found that at some high street banks charges were as much as £90 for borrowing this amount - up to four times the maximum charge of £22.40 on a payday loan.
Customers at RBS could face costs of £90, while those at Lloyds, HSBC and TSB could face £80 in costs, Which? reported.
Currently, the FCA cap on payday lenders for one day is 80p, compared with £10 for the Lloyds Classic Account or TSB Classic Account, Which? said.
Such unarranged overdrafts have come under the spotlight recently with the Competition and Markets Authority proposing that banks set their own monthly unauthorised overdraft charge cap, which they would have to show clearly.
Commentators have previously described unarranged overdrafts as "cash cows" for banks.
The CMA's final recommendations on the issue are due to be published in August.
It is hoped that a cap would then encourage banks to compete to drive down the costs, rather than having a single charge cap.
But Which? argues the proposals are unlikely to make much of a difference as many banks already put their own caps on charges.