‘Banks to make current account charges clearer’
November 5, 2009 at 1:32 pm
The Office of Fair Trading (OFT) has reached an agreement with UK banks to make charges made on personal current accounts more transparent.
The agreement comes after the latest study by the OFT into the current account market. Three main areas of customer concerns were identified:-
- The cost of current account charges is not made clear
- The difficulty of switching accounts between banks
- The way banks charge for unauthorised accounts
The banks will now provide an annual summary of the costs for each account. Charges will be shown prominently on bank statements and average credit and debit balances will be provided. The OFT thinks that the changes will make comparison of bank charges easier and will encourage customers to shop around in a similar way to getting insurance quotes.
The OFT and the banks have worked with the payments processor Bacs (originally the Bankers’ Automated Clearing Services) to smooth the transition of Direct Debit payments for customers who switch accounts between banks.
The chief executive of the Office of Fair Trading, John Fingleton, said that the changes would give consumers more confidence in getting better value from switching banks. Also it will make it easier to keep track of the costs of the current accounts. He said: “Banks will need to offer more competitive and innovative products and services to attract as well as retain customers.”
The agreement has been welcomed by the consumer organisation Which? whose chief executive, Peter Vicary-Smith, said that the changes were a step in the right direction and hoped that customers would feel more assured about switching accounts. This would empower customers to “ditch those banks that offer bad value and poor customer service.”
