OTF to promote account switching
(9 October 2009 – UK) The United Kingdom Office of Fair Trading (OFT) urges banks to improve the ability to switch accounts to create more competition in the market.
The UK's Office of Fair Trading is working with payments processor Bacs on steps to improve account switching for consumers as part of a raft of measures designed to inject more competition into the market for current accounts.
The move comes after a 2008 study by the group identified problem areas relating to transparency of cost to consumers, including real and perceived costs related to switching and overdraft fees.
The OFT will create an annual summary on the costs of their account for each customer to help them better understand the charging patterns and help consumers determine the benefits of switching banks.
The group is also endeavouring to help consumers understand and compare the costs of their accounts through new advice and tools, including an interest calculator on its website.
Bacs has agreed to upgrade functionally for transferring direct debits from bank to bank, and to provide a new customer guide and website to assist consumer education.
John Fingleton, chief, OFT, said that as consumers become more aware of the costs of their account and more confident in switching as a means to get better value, banks will need to offer more competitive and innovative products and services to attract as well as retain customers.
The problem area of unarranged overdraft charges, still needs to be resolved for the market to work in the best interests of bank customers, Mr Fingleton concluded.
The OFT is currently undertaking work in this department as it waits on the outcome of a Supreme Court case into bank fees.
The move comes after a 2008 study by the group identified problem areas relating to transparency of cost to consumers, including real and perceived costs related to switching and overdraft fees.
The OFT will create an annual summary on the costs of their account for each customer to help them better understand the charging patterns and help consumers determine the benefits of switching banks.
The group is also endeavouring to help consumers understand and compare the costs of their accounts through new advice and tools, including an interest calculator on its website.
Bacs has agreed to upgrade functionally for transferring direct debits from bank to bank, and to provide a new customer guide and website to assist consumer education.
John Fingleton, chief, OFT, said that as consumers become more aware of the costs of their account and more confident in switching as a means to get better value, banks will need to offer more competitive and innovative products and services to attract as well as retain customers.
The problem area of unarranged overdraft charges, still needs to be resolved for the market to work in the best interests of bank customers, Mr Fingleton concluded.
The OFT is currently undertaking work in this department as it waits on the outcome of a Supreme Court case into bank fees.
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