Following an OFT study that identified major problems in the market, including lack of transparency, the regulator is now calling for an industry working group to develop ways of giving consumers greater control and access to real-time information on their account.
Other commitments include the need for minimum standards to apply when offering customers the ability to opt out of unarranged overdraft facilities, and the development by banks of best practice for customers in financial difficulty who incur unarranged overdraft charges.
The OFT says it expects to see in the industry move towards the commitments over the next two years.
The British Bankers’ Association executive director of retail Eric Leenders supports the OFT’s move.
He says: “We are happy to continue to work with the OFT and others to ensure that it is simple for consumers to shop around and switch accounts to get the deal that is best for them.
“The enhancements planned to improve transparency on statement sheets and websites are positive examples of the further changes that will be made in the personal current account market in the months ahead.”
However, the Financial Services Consumer Panel says today’s announcements are “too weak and will take too long to deliver real improvements”.
Chairman Adam Phillips says: “The OFT’s response today is weak. It relies on banks improving themselves, when they have patently failed to do this in other areas in the past. If the OFT’s proposals do not work, it must deliver on its commitment to make further intervention in the market, including legislation.”
Which? chief executive Peter Vicary-Smith says: “Those who haven’t yet joined in and improved their charging structures need to wake up and smell the coffee. We will continue to hound those dragging their heels and still believe that the changes we’re proposing to the Financial Services Bill* will help the OFT.”