Current account ‘jungle’ must be put right

As unfair banking charges cripple Britain’s most vulnerable current account holders, the National Consumer Council (NCC) is today calling on banks to be transparent and provide better, clearer and more upfront information to their customers.

Responding to The Office of Fair Trading’s (OFT) consultation on personal current accounts, NCC is calling for the UK personal current account market to be brought into line with the improvements promised for customers in Northern Ireland, as a matter of urgency.

Ed Mayo, Chief Executive at the National Consumer Council (NCC) says: ‘Navigating through the current account jungle can be a real challenge. People are reluctant to switch because they are either worried about standing orders and direct debits not being paid, or feel that the process is too complicated.

‘Those on low incomes or with limited banking experience are most likely to be adversely affected. For them a default charge of £39 is enough to push them into debt. It’s time banks stopped pulling the wool over people’s eyes and started behaving more responsibly.’

The NCC is calling on the OFT to:

require that banks provide more information on bank statements, including clear explanations of how and when interest rates and charges are applied;

investigate how the costs of ‘free banking’ arise and how the (often hidden) burden of those costs and interest forgone is distributed between different groups of customers. For example, in overdraft interest and charges and packaged accounts;

include basic bank accounts within the scope of the market study to make sure that disadvantaged and vulnerable consumers get a fair deal.