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Northern Ireland banking

Name of complainant: Which? (Consumers Association) in conjunction with the General Consumer Council for Northern Ireland

Date of complaint: 15 November 2004

Subject of complaint

The consumers association identified four areas of concern with the personal current account (PCA) market in Northern Ireland.

  • Northern Irish banks pay considerably less interest than rivals when accounts are in credit.
  • Northern Irish banks charge significant sums for activities that other banks do not charge for at all.
  • Northern Irish bank charges often lack transparency.
  • Northern Irish banks display a striking degree of similarity in terms of what they charge for and the amount they charge.

OFT response: 11 February 2005

The OFT identified features of the personal current account market in Northern Ireland which appear to restrict competition, and which may warrant further investigation by the Competition Commission (CC).The OFT found evidence of behaviour among the four leading providers of PCA services leading to, or demonstrating, weak competition between them:

  • they impose a number of charges when customers are in credit and overdrawn which are not found in the rest of the UK (and there are no offsetting advantage such as higher interest payments on positive balances)
  • they have stated that their charges are not directly cost-derived
  • there is evidence of parallel pricing behaviour among them, and of price leadership (where one firm in a market sets a price which others follow) and possible price signaling (where the price leader reveals its price changes in advance to its competitors)
  • they do not actively compete for customers switching accounts.

In addition, there appeared to be low levels switching by customers, both between rival banks and to alternative accounts within the same bank.

Action following response

OFT referred the Northern Ireland Bankings Market to the Competition Commission for further investigation.

The OFT has a duty under s.162 of the Enterprise Act 2002 to keep under review the carrying out of any enforcement order. In particular, the OFT must consider whether, by reason of any change of circumstances, an enforcement order is no longer appropriate and needs to be varied or revoked. On 18 May 2010 the OFT advised the Competition Commission that parts of the Northern Ireland Personal Current Account Banking Market Investigation Order 2008 needed to be varied or revoked as a result of the coming into force of the Payment Services Directive. The OFT's advice can be found on the Current reviews of orders and undertakings page. 

See the Competition Commission's final decision.

Key documents




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