Current account switching is about to reach new heights, as more than 1.38 million UK consumers plan to change banks over the next six months, according to research by independent financial comparison website MoneyExpert.com.
MoneyExpert.com has attributed the surge to a combination of increased competition in the current account market and consumer dissatisfaction over erratic current account penalty charges, which, according to the website, range from GBP10 to as much as GBP39 for a bounced check, with an average charge of GBP32.
Penalty charges have been an issue of contention recently and the website commented that the Financial Ombudsman Service is currently receiving in excess of 1,000 bank charge enquiries a day and has sent 3,500 letters to banks in the past six months on behalf of consumers.
Sean Gardner, chief executive of MoneyExpert.com, commented: Customers have got the message that it is relatively straightforward to move bank and that there are a range of good value deals out there. The advice has to be that if you are unhappy with the deal from your bank you should move.
MoneyExpert.com commented that banks are starting to introduce special deals, with some offering low authorized overdrafts and increased credit interest rates, in contrast to the average 12.6% interest rate charged on authorized overdrafts and rates as low as 0.1% paid when customers are in credit on their account.
Mr Gardner concluded: Anger over bank charges is adding to the pressure on banks as customers realize that it is possible to get their money back. Increasingly, the banks are paying up rather than taking the dispute to the Financial Ombudsman.
The Office of Fair Trading is currently investigating current account penalty fees. A decision is due in March as to whether charges should be reduced in line with similar moves in the credit card market, where fees are now a flat GBP12.