OFT to open formal inquiry into bank fees
The Office of Fair Trading has decided to formally inquire into the issue of bank charges, after thousands of complaints about unfair charges for things like bouncing a check or overdrawing a current account. The OFT has been looking into the issue on an informal basis for the past half-year and has concluded that a more thorough look is warranted.
After looking into the issue, the OFT has said that it agrees with customers that current account charges are too high, but it has decided that simply putting a cap on fees as was done with credit card fees recently will not be likely to solve the problem. It wants to make sure that, if measures are taken to lower fees for overdrafts and bounced checks, the banks won’t make up the losses by introducing new fees elsewhere, where they could apply to all bank customers and not just to those who make mistakes with their accounts.
The current round of complaints about bank fees grew out of the OFT’s earlier finding that some credit card charges were too high, when it said that the same principle might apply to current accounts charges as well. The banks, however, have denied that the fees they charge are illegal even though they have been offering refunds to complaining customers rather than letting the matter go in front of the courts.
Details of the scope of the new study will be released by the OFT in late April, and the results of the investigation are expected to be ready by the end of the year.