In response to consumer concerns over bank current account charges, the UK Office of Fair Trading has announced an in-depth study of retail bank pricing, involving a formal investigation into the fairness of bank current account charges. Full details of the study will be announced in late April 2007.
This study follows an initial review carried out by the Office of Fair Trading (OFT) into these charges, reflecting its desire to take a strategic approach to the examination of the fairness of these charges in the wider context of competition in the UK banking sector. The initial review discovered that the OFT shared the public’s concern over the bank charges, but also recognizes that the application of the general principles it set out in 2006 to the banking industry is not straightforward and that a more detailed examination is needed.
John Fingleton, OFT chief executive said: The initial scoping work we have undertaken has demonstrated to us that this is not only an issue for those people who are being charged, but also for customers who are not defaulting on their bank accounts.
A quick-fix solution is not the answer as this might be of limited long-term benefit and could have unintended and far-reaching consequences across the whole sector and on consumers as a whole. We will look forward to co-operation from the banking sector in reaching a conclusion to this matter which is satisfactory to consumers and which will strengthen competition, efficiency and customer outcomes in the UK retail banking sector.