(1888PressRelease)
July 19, 2008 - London (Online-Unsecured-loans) July 18, 2008: According to some very pithy observations made by the Office of Fair Trading ( OFT) most of the banks' earnings from the current accounts was drawn indirectly or even in a very shadowy manner. It is so because most of the current account holders were not even aware about the rates of bank charges, or what was the amount of interest accruing to them on the balance to their credit.
All this resulted in a weaker credit givers' incentives to fight it out in a market which creates more revenues for the British banks than the total sum accruing from the savings and credit cards combined together. "In the view of the OFT, the status quo is not satisfactory," the watchdog mentioned in its just released report. It further said that the customers' poor knowledge of things like the bank offers certainly dragged the sector down, even though many of them are in fact are paying more than most of others.
'Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well, OFT Chief Executive John Fingleton elaborated on the issue, further adding, 'Consumers lack the information they need to choose the best deal, and this in turn weakens the banks' incentives to compete."
The watchdog has asked the banks to find out the amount a prospective customer will have to pay in a fixed scenario including the agreed overdraft limit. In the year 2006, about 1.4 million people paid 500 pounds in the form of charges.
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