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5 Aug 2020

News

Moneyfacts comments on Office of Fair Trading's investigation into the charges banks impose on their customers.

Andrew Hagger, head of news and press at Moneyfacts.co.uk comments:

“Whilst the news that the findings of this long overdue OFT study won’t be published until the end of the year is disappointing, an in-depth investigation will hopefully avoid the situation that credit card consumers have endured following the imposition of a £12 cap.

 Those customers who run their accounts within agreed parameters are now subsidising those who either abuse their agreed credit facilities or fail to make the required monthly repayments.

“The talk of paying for your current account is understandably greeted with cries of horror, especially as we’re used to receiving it for free.

“What does the end of free banking mean? I’m sure many people assume that it may cost £10 per month and receiving nothing extra in return. The banks can’t expect to charge a monthly fee on one hand and pay their customers a paltry 0.1% credit interest and hammer them with charges on the other.

“If the monthly charge was a nominal £3 - £5 per month and in return you received a choice of competitively priced products, fair and transparent charges and exceptional levels of customer service, then there may be slightly less resistance to paying for your banking service – but what are the chances of this happening?

“Whilst comparison sites do their best to help customers select the right product for their circumstances, perhaps the introduction of transparent (jargon free) standard rates and a charging tariff should be introduced in a similar way to the summary box on credit card literature.

“Only when institutions are forced to supply the same level of detail of rates/fees/charges information in a standard and simple to understand format, will the consumer be able to compare providers and make an informed choice.”

 

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