Office of Fair Trading: Current accounts "are not serving customers well"

www.moneynews.co.uk > General finance > Office of Fair Trading: Current accounts "are not serving customers well"

Office of Fair Trading: Current accounts "are not serving customers well"

Wed 16th Jul 2008

Britons are suffering from overcomplicated high street bank accounts, the Office of Fair Trading (OFT) has claimed.

A report published today found that banks gain £8.3 billion a year from current accounts that people do not understand and are difficult to switch.

The Personal Current Accounts in the UK study also found that 81 per cent of banks' income comes from insufficient funds charges (£2.6 billion) and net credit interest income (£4.1 billion).

Penalty fees netted banks £1.5 billion, with many customers not knowing how much they paid in bank charges.

John Fingleton, chief executive of the OFT, said customers lacked the information necessary to choose the best option, lessening banks' incentives to compete.

"There is much the banks could do to improve how the market works," he said.

Responding to the report, Lloyds TSB said current account market competition is "fierce".

Catherine McGrath, director of current accounts, said that 79 per cent of over a million people who joined Lloyds TSB last year found their current account switch "to be easy".

Lloyds TSB also said it would work with the OFT to find areas of improvement in the market.

Related News : General finance
	Citizens Advice welfare applauds government
	Confused.com energy defends British Gas
	Bank of Ireland passes stress test
	Tesco Mobile deal 'courts consumers'
	Scottish Widows Investment Partnership notes favourable response
	Customers should fix now, says moneysupermarket.com energy
	Confused.com highlights importance of getting the best deal
	Prices on the rise, says moneysupermarket.com energy
	Bank of Scotland economic report 'suggests transitional phase'
	Clydesdale and Yorkshire Banks security advice issued

Related News : Banking
	Young people 'should be taught to save'
	Families 'should plan for their children's future
	Switching bank accounts 'not as easy as banks portray'
	Brits facing finance difficulties 'should talk to their bank'
	Brits 'should utilise Isa allowances'
	Brits advised on investment options
	Children 'should be given bank accounts at 16'
	Falling inflation 'could help Brits save'
	Money worries 'are mounting for many'
	Contactless payment 'is secure and convenient'