Banks have agreed to make it easier for customers to switch current accounts and to make it clearer what their charges are, the Office of Fair Trading (OFT) has said. 

Under the proposed changes banks are to provide monthy reports and an annual summary of the actual account charges, this would then enable consumers to compare the prices and benefits of other bank accounts and make it easier to switch accounts for a better deal, a bit like car insurance. 

In July 2008, the OFT conducted a review on UK personal accounts and found that they were "not working well" for consumers they also established that not many individuals were aware of their account's interest rate or what they paid in charges. 

During 2006 the OFT estimates that the banks earned the equivalent of £152 for each of the 54 million active accounts in the UK. 

European Commission announced in September 2009 that only 9% of EU consumers switched accounts in 2007 and 2008, compared with 25% of car insurance customers.

Source: oft.gov.uk

DebWizard comment

Although the proposed changes are welcome, what is of concern is that we will all have to wait for up to two years for them to be introduced as it is estimated that they will not come into force until 2011.
 
I am also concerned that the issue regarding unauthorised overdraft charges has still  also not been settled - this is because the legal battle between the banks and the OFT continues, with banks appealing earlier Court decisions to allow the OFT to decide whether charges are fair or not.

Bank charges need to be made clear. One hopes this issue will be resolved once the House of Lords, which is currently considering the issue, announces its decision.

The latest proposals are a move in the right direction but it is annoying that it has taken this long for the banks to do something positive.

If we had had these changes some 15 years ago then many customers would not have faced hidden and obscene charges for going overdrawn.
 
It's common sense that a good working business needs to demonstrate transparency and be up front with costs which begs the question: "why have banks been allowed to get away with this deception for so long?"
 
Consumers have had enough of underhand and devious methods, especially where banks are involved. These new measures should help people plan their finances and give them the opportunity to walk away from a bank that is not open and up front.
 
The new changes will also mean that banks will have to work harder to keep a customer - that’s a first, I say with a wry smile.

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