The OFT has issued its long awaited report and consulation into current accounts terms and conditions, and funding including
bank charges
Download
Personal current accounts in the UK - a market study (pdf 1.2 mb)
Download the
executive summary (pdf 146 kb)
the report found:
we believe the ability for the market to function well has become distorted in three
ways:
• first, there seems to be a substantial cross subsidisation from those consumers who incur
insufficient funds charges to those who do not; and to a significant extent from ‘vulnerable’,
low income and low saving consumers, to higher income, higher saving ones
• second, the extent of this cross subsidisation means there is a substantial misalignment
between the banks’ revenues and their costs on many of their products and services. This
may lead to inefficiency through under or over consumption of services by consumers, and
• third, the lack of consumer awareness and switching on the less visible elements provides
banks with little incentive to compete on them. This may also have an impact on longer term
productivity within the banking sector. Without competition in these areas, banks have lower
incentives to create new and innovative services.
it also found that
bank charges revenue amounts to 30% of current account income, and that the APR of an unauthorised
overdraft amounts to an average of over 200% when you include charges.
As part of CAG YOU are a STAKEHOLDER. I expect CAG intends to be review the report and looking at the Consultation Paper, and will make a contribution to the consultation.
Therefore, it would be useful if YOU put your views on this thread, so CAG can help express YOUR opinion and you can have YOUR say on the findings.
Oft Report 
