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OFT: Personal accounts not working well

By Sarah Engle, Wed 16 Jul 2008 - Published in Banking

The Office of Fair Trading (OFT) said in a new report that the personal current account market is not working well for customers.

Findings from the research said over three-quarters of people with a personal current account do not know their credit interest rate.

In addition, a "significant number" of consumers do not know how much they are paying in bank charges.

The charge for insufficient funds brings in a revenue of £2.6 billion for banks and net credit interest income produces £4.1 billion.

Insufficient fund charges have increased 17 per cent between 2003 and 2007 and 12.6 million accounts incurred a charge during 2006.

John Fingleton, OFT chief executive, said: "Customers lack the information they need to choose the best deal and this in turn weakens the banks' incentives to compete."

Mr Fingleton added that he hoped this report will encourage banks to improve how the current personal account market works.

However, Catherine McGrath, director of current accounts at Lloyds TSB, said 79 per cent of the people they researched who have switched accounts reported it to be "easy", according to the BBC.