MoneyExpert.com on OFT current account report

MoneyExpert.com research* and analysis:

  • 52% of bank customers agree with the principle of paying bank charges
  • Only 17% of bank customers say they understood how charges work when they opened their account
  • 71% of bank customers described bank charges as unclear
  • 58 per cent of people are not prepared to pay for a bank account even if it meant a fairer system**
  • 24% of current accounts offer an interest free overdraft facility
  • 45% of current accounts charge less than 0.5% credit interest

Sean Gardner, director of MoneyExpert.com, said: "This report is a welcome analysis of the state of the current account market."

"One logical conclusion of the OFT report would be to remove the less visible fees imposed by banks and replace them with simple monthly charges similar to the existing ‘packaged account’ model."

"Our research shows that 58 per cent of people are not prepared to pay for a bank account even if it meant a fairer system. And as the cost of living rises we expect attitudes towards paying a monthly bank account fee to harden significantly. However we would welcome further consumer research into these issues to ensure that the views of consumers are considered in the long term."

"While the OFT has focused on bank charges, the factors that influence a consumer’s decision when choosing a bank vary dramatically. They include good customer service; having a debit card available; specific online or telephone banking facilities; credit interest amounts; interest-free overdraft options and more. Some people just want to go into their local branch because of the convenience."

"For many people they are choosing a bank, not a bank account."

"Banks should take heed of the OFT’s findings – everyone wants clarity on fees in particular. People don’t like to be stung without warning although consumers must take some responsibility when the terms and conditions are clear."

"There are some fantastic deals out there – the current account market is competitive and consumers should find switching easy. In fact almost 80 per cent of consumers who have switched found the process fairly easy or very easy according to the OFT."

"Many banks now have dedicated switching services which means that you can swap banks in less than 10 days – which is in line with the Banking Code."

"And some major banks like Lloyds TSB have also introduced warning services for their customers so that you can be notified before you hit your overdraft limit. These are all positive steps that benefit the consumer."

Notes:
* ICM Research interviewed a random sample of 1016 adults aged 18+ online 17th – 19th August 2007. Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk
** ICM Research interviewed a random sample of 1003 adults aged 18+ by telephone between 16-17th April 2008. Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk

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