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| Version 1 | Version 2 |
|---|---|
| Bank accounts 'not working well' | Bank accounts 'not working well' |
| (about 1 hour later) | |
| Personal current accounts are not working well for consumers, the Office of Fair Trading (OFT) has said. | Personal current accounts are not working well for consumers, the Office of Fair Trading (OFT) has said. |
| In a report, the regulator said much of the banks' revenues in this £8bn industry were "derived opaquely". | In a report, the regulator said much of the banks' revenues in this £8bn industry were "derived opaquely". |
| The OFT said 81% of income came from charges levied on customers with insufficient funds in their accounts and from interest payments. | The OFT said 81% of income came from charges levied on customers with insufficient funds in their accounts and from interest payments. |
| In addition, many customers did not know how much they paid in bank charges, the report said. | |
| The report also found that more than three-quarters of customers did not know the interest rate of their current account. | The report also found that more than three-quarters of customers did not know the interest rate of their current account. |
| The OFT said that the complexity and lack of transparency of current accounts made it hard for customers to compare accounts from different banks. | The OFT said that the complexity and lack of transparency of current accounts made it hard for customers to compare accounts from different banks. |
| As a result, just 6% of customers surveyed by the OFT had switched accounts in the past 12 months. | As a result, just 6% of customers surveyed by the OFT had switched accounts in the past 12 months. |
| Potential action | |
| John Fingleton, chief executive at the OFT, said: "Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well." | John Fingleton, chief executive at the OFT, said: "Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well." |
| FROM THE TODAY PROGRAMME More from Today programme | |
| He told BBC News that the OFT would now urge the banks to come up with ideas on how they would make information clearer to customers. | |
| "If the banks do not play ball, it will be very difficult to avoid regulation in this market," he said. | |
| There are about 64 million accounts in the UK, of which 54 million are thought to be active. | |
| The OFT believes the banks earned the equivalent of £152 per active bank account in 2006 - that is more than savings and credit cards combined. | |
| But the industry body, the British Bankers Association (BBA), said that the £8bn was just what it collected and did not reflect the cost of offering the bank accounts. | |
| "We are disappointed that the report presented only revenues without taking into perspective any of the costs being incurred in respect of running accounts," a spokesman said. |