OFT announces bank account switching help

08/10/2009

Britain's banks have agreed to make it easier for customers to switch accounts, in a move which could help provide debt problems solutions.

The Office of Fair Trading (OFT) announced that measures are being put in place to improve the system by which people transfer old funds into new accounts through Direct Debit.

A website for consumers, giving information and tips on bank account switching, is also to be provided.

Bank charges and penalty fees are also to appear in annual statements, in order to make the cost of a customer's current bank account clearer.

These moves will assist customers in making informed decisions about their accounts.

Costs of individual products, and fees such as overdraft AERs, vary widely from provider to provider.

This means that many customers are getting much worse value from their banks than they might have if they were with a different bank.

“Making charges prominent on monthly statements, so that consumers are more aware of the charges they pay is a positive step forward and one that is likely to focus the mind on whether to look at switching your bank account" explained Kevin Still, Director, EuroDebt.

"Any steps to reduce problems that arise from transferring Direct Debits are welcomed as this is fundamental to the process of moving salary or wage payments to a new account and then streamlining the switching of regular payments like your mortgage and other essential expenditure items like utilities and council tax. EuroDebt has established its bank switching service at www.bankswitching.co.uk to provide all UK residents with a prepaid current account where there are no penalties for failed direct debits.”

John Fingleton, OFT chief executive, added: "As consumers become more aware of the costs of their account and more confident in switching as a means to get better value, so banks will need to offer more competitive and innovative products and services to attract as well as retain customers."

Tags; Debt Management and Banking, Young Family Finances, Credit Card Lifestyle, Recent Graduate Debt,

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