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Personal current accounts in the UK

Starting date: 16 July 2008
Closing date: 31 October 2008

The OFT is seeking comments from stakeholders on the high level concerns identified in its market study into personal current accounts in the UK.

We have found evidence of competition in the PCA market but we are concerned that certain features of the market are not working well for consumers.

The positive aspects include:

  • high levels of customer satisfaction
  • customers receive many day-to-day services without incurring fees
  • internet and telephone banking makes it easier for customers to manage their account, and
  • there are a number of providers in the market and evidence of modest competitive pressure on the four established banks by challengers.

The significant areas of concern are:

  • low levels of transparency on fees that make up a high proportion of the payment that consumers make for their current account services, both in terms of their amount, frequency and the manner in which they are levied
  • the complexity in the way that these charges are implemented that makes it hard for consumers to predict when they will be incurred
  • a lack of simple mechanisms for consumers to control whether they use services for which they are charged
  • a significant proportion of consumers consistently incur charges and appear to underestimate both their level and frequency, and
  • a general perception, not unfounded, among customers that switching is both complex and risky, contributing to low levels of switching between banks and an inefficient allocation of the risks from switching.

Download Personal current accounts market study - a consultation paper (137 kb)
Download Personal current accounts in the UK - an OFT market study (pdf 1.2 mb)
See the market study page

Contact
Email: Retailbanking.study@oft.gsi.gov.uk

Next steps

We will collate responses to the consultation and publish a formal summary of these. Depending on the outcome of the consultation we hope to publish a further or final report early in 2009.

Our aim is for a final report containing recommendations that the banking industry, in consultation with government and other relevant stakeholders, will take forwards. However we will also consider other routes to implement remedies should that not happen. 

Separately, we will also be considering whether failure to adopt any particular future recommendations could lead to enforcement under the UTCCRs or the Consumer Protection from Unfair Trading Regulations 2008. Naturally, we would give the businesses the opportunity to remedy any breaches of the law we identified before taking enforcement action.




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