Bank Accounts In-ability

Bank Accounts In-ability



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The Office of Fair Trading has expressed a concern regarding the lucrative £8 billion personal current accounts industry.

With 64 million bank accounts registered in the UK, the OFT highlighted that around 81% of the banks revenue was derived from customers interest payments (£4.1 bn) and charges gained from insufficient funds (£2.6 bn), working out at an avertable £152 per active account.

Such a high preventable percentage rate would no doubt drop significantly were the three-quarters of customers fully aware of the unnecessary interest rate of their current account and the resulting bank charges they incur. There appears to be a certain taboo and risk related to switching accounts, a factor that the survey has highlighted a need to clear up to help minimise outgoings and therefore the debt.
 
Customers have found comparing their bank account with other banks an increasingly difficult task, mainly due to the complexity of today’s accounts. The survey uncovered that a mere 6% of customers questioned switched accounts in the past 12 months, the lowest tally in Europe.
 
OFT Chief Executive John Fingleton stated, “Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well. Customers lack the information they need to choose the best deal, and this in turn weakens the banks' incentives to compete.”

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