OFT: Personal Current Accounts Report

Personal Current Accounts Report

July 16th 2008

Personal current accounts are not working well for consumers, the Office of Fair Trading (OFT) has said.

In a report, the regulator said much of the banks' revenues in this £8bn industry were "derived opaquely".

The OFT said 81% of income came from charges levied on customers with insufficient funds in their accounts and from interest payments.

In addition, many customers did not know how much they pay in bank charges, the report said.

The report also found that more than three-quarters of customers did not know the interest rate of their current account.

The OFT said that the complexity and lack of transparency of current accounts made it hard for customers to compare accounts from different banks. As a result, just 6% of customers surveyed by the OFT had switched accounts in the past 12 months.

John Fingleton, chief executive at the OFT, said: "Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well."

Full report here

Consultation

The OFT has now launched a consultation exercise to invite comments from stakeholders on the high level concerns identified in the report.

Download Personal current accounts market study - a consultation paper (137 kb)

The consultation period

The consultation period began on 16 July 2008 and will run until 31 October 2008. This period is in accordance with the criteria set out in the Cabinet Office's Code of Practice on Consultation. All responses and comments should be sent to:

Retail Banking Team Room 1E Office of Fair Trading Fleetbank House 2-6 Salisbury Square London EC4Y 8JX

Email: Retailbanking.study@oft.gsi.gov.uk