OFT to investigate bank charges

The Office of Fair Trading (OFT) is to launch an investigation into bank charges, it has announced.

In the preceding six months, the OFT has been undertaking an “informal” review of bank practices in relation to charging.

Consumers have increasingly been complaining about the penalty charges that are imposed by banks when a customer, for example, goes overdrawn without permission or does not have enough in their account to clear a direct debit.

News of the investigation follows similar scrutiny of credit card penalty charges last year, following which the OFT ruled that any charge over £12 would be considered “unfair”.

Credit card lenders were forced to cut the amounts they charged in penalty fees from an industry average of £30.

“The issue of bank current account charges is a matter of real concern to the banks’ customers, and raises wider questions about competition and transparency of pricing,” OFT chief executive John Fingleton told the BBC.

Meanwhile, industry body the British Bankers’ Association issued a short statement in which it said “looks forward to engaging in a dialogue” with the OFT.

© Adfero Ltd

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