OFT to review Personal Current Account market
The Office of Fair Trading (OFT) is to assess whether banks have made it easier for customers to switch current accounts.
Following a review in 2008 the OFT said that the personal current account market was not working well for consumers.
It reported a lack of transparency over charges, making it difficult for customers to compare their bank account with others in the market.
This gave customers little incentive to switch, the OFT said, especially as switching was perceived to be a complex and risky process.
The OFT now plans to review the progress made by banks in addressing these concerns.
If not enough progress has been made, an investigation into the banking industry by the Competition Commission could be launched.
Claire Hart of the OFT said: “We committed to keeping the personal current account market under scrutiny following our 2008 study.”
“Through this review, we want to understand what progress banks have made in providing customers with better information about account charges, greater control over their accounts and easier account switching facilities.”
Nationwide building society has welcomed the review and said it has recorded a 67 per cent increase in the number of people switching to a Nationwide current account in the last week.
It attributes the increase to the recent problems experienced by High Street banks.
John Crossley, Nationwide’s head of current accounts, said: “The Society has already implemented many of the requirements of the OFT from its March 2010 report and was one of the first providers in the UK to implement an annual current account summary allowing customers to easily review any charges applied to the account during the year.”
Independent financial research company Defaqto, has recently launched a Star Rating for current account switching.
It gives current accounts a rating between 1 star and 5 stars according to the switching related features it offers.