OFT decision to drop bank charges case

Commenting on the announcement by the OFT that it is to end its investigation of bank charges, Kevin Mountford, head of banking at moneysupermarket.com said: "There's a sense of inevitability about this climb down by the OFT after it lost in the Supreme Court last month.  Whilst this is a blow to the millions of people who are trying to reclaim overdraft charges from their bank, in truth the OFT's campaign has actually forced the banks to cut their charges already, so millions of customers will be better off in future.  There is also the threat of future legislation hanging like a sword of Damocles over the banks.

"For those who are still trying to reclaim charges the OFT has left the door open for them to take the banks to the Financial Ombudsman and no doubt some will choose to pursue this, but many are likely to quietly drop their complaints.

"The advice for current account customers is clear.  Firstly, if you think that you might go overdrawn contact your bank immediately and arrange an authorised overdraft, this is the easiest way of avoiding the worst of the charges.  But most importantly customers should realise that they don't have to stick with the same bank.  There are a range of highly competitive current accounts on the market and the switching process is easy, with most of the major banks now having dedicated switching services to do most of the hard work.  We urge the regulators to turn their attention to improving the switching process still further to facilitate customers voting with their feet."