OFT Calls for Banks to Clarify Current Account Charges

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OFT Calls for Banks to Clarify Current Account Charges

Fri, 09 Oct 2009

The Office of Fair Trading (OFT) has called for banks to clarify their current account charges for consumers. The OFT want banks to provide an annual summary of account charges in a bid to make banking fees more transparent. It is hoped the proposals will come into effect by 2011, giving consumers a better idea of the cost of banking.

Banks will also make it easier for customers to shift direct debit payments from an old account to a new one, meaning customers will be able to shift accounts to one with lower fees rather than staying with a more costly account to avoid the hassle of moving direct debit payments.

The reforms follow the findings of an OFT investigation in July 2008 which felt that personal current accounts weren't 'working well' for consumers, as they were unaware of any charges and did not know the interest rate on their account. The OFT estimated that banks earned the equivalent of £152 on each of the UK's 54 million current accounts in 2006.

The European Commission last month added to the need for reform, labelling information on banking fees 'incomprehensible'. Information on savings account is not said to share the same problem.

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