16 July 2012
Banks to undergo current account check-up
The Office of Fair Trading (OFT) is to assess how UK banks operate current accounts for their customers and how much progress they have made since the OFT review in 2008. The assessment will look specifically at whether banks have made it easier for people to switch accounts and if there has been greater transparency and understanding of overdraft charges.
In 2009 the Banking industry defeated a legal attempt by the OFT to reduce overdraft fees. Since then fees have become more transparent, if not necessarily cheaper.
Last September the Independent Commission on Banking recommended that more competition was needed amongst high street banks, as well as recommending a new, industry-wide, current account redirection service that would be free to customers.
The banking sector responded, suggesting a move towards establishing such a service, as well as services such as warnings when they near their account limit and more transparent overdraft fees.
Despite this, in February, the then head of the OFT, John Fingleton, said the banks had been dragging their feet over improving their services and warned them that they faced an enforced shake-up.