17 January 2018
visit www.avoka.com

OFT harries banks to improve account switching

08 October 2009  |  6913 views  |  1 London - Big Ben

The UK's Office of Fair Trading is working with payments processor Bacs on steps to improve account switching for consumers as part of a raft of measures designed to inject more competition into the market for current accounts.

The move follows a 2008 study by the watchdog into the £8 billion current account market in the UK. It identified three major problem areas relating to transparency of cost to consumers, "real and perceived difficulties over switching", and crippling overdraft charges.

Following consultations with banks and consumer groups, the OFT says the industry has agreed to introduce an annual summary of the cost of their account for each customer and to provide more information on charging patterns that will help consumers to estimate the potential benefits of switching bank.

The OFT says it is also taking steps to help consumers understand and compare the costs of their accounts through new advice and tools, including an interest calculator, on its Consumer Direct website.

To improve the switching process, the OFT says Bacs has agreed to upgrade functionality for transferring direct debits from bank to bank and provide a new consumer guide and Website as part of an effort to increase consumer awareness of the automatic switching process.

Work on unarranged overdraft charges is currently on hold, as the OFT and industry await the outcome of an ongoing Supreme Court case into bank fees.

John Fingleton, OFT chief says: "As consumers become more aware of the costs of their account and more confident in switching as a means to get better value, so banks will need to offer more competitive and innovative products and services to attract as well as retain customers.

'However, the third problem area we identified - unarranged overdraft charges - still needs to be resolved for the market to work in the best interests of bank customers.'

Comments: (1)

A Finextra member
A Finextra member | 09 October, 2009, 09:11

Online banking research recently conducted by Mapa certainly suggests that banks have the appetite for accepting applications from customers wanting to switch their current account, there are a number of banks offering cash incentives for customers to do so.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Payments Council rebuts OFT criticism on Faster Payments

Payments Council rebuts OFT criticism on Faster Payments

11 August 2009  |  8093 views  |  0 comments
EC consults on bank account switching

EC consults on bank account switching

05 June 2007  |  9715 views  |  0 comments
OFT extends interchange probe

OFT extends interchange probe

09 February 2007  |  8150 views  |  0 comments
Banks under pressure on account switching

Banks under pressure on account switching

01 December 2006  |  13084 views  |  0 comments
Bacs ordered to open up to businesses and consumers

Bacs ordered to open up to businesses and consumers

01 March 2006  |  11259 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.fivedegrees.nlvisit www.capgemini.com

Top topics

Most viewed Most shared
Buffett rubbishes cryptocurrencies; South Korea preps exchange crackdownBuffett rubbishes cryptocurrencies; South...
11556 views comments | 15 tweets | 17 linkedin
BNP Paribas Asset Management completes fund transaction blockchain testBNP Paribas Asset Management completes fun...
10165 views comments | 14 tweets | 33 linkedin
Europe begins Open Banking era in subdued styleEurope begins Open Banking era in subdued...
9614 views comments | 32 tweets | 34 linkedin
Crypto mining threatened by power capacity concernsCrypto mining threatened by power capacity...
9474 views comments | 17 tweets | 18 linkedin
Exchanges call for global fintech standardsExchanges call for global fintech standard...
9201 views comments | 17 tweets | 13 linkedin

Featured job

Competitive
Germany, Austria or Switzerland

Find your next job