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| NI bank users 'pay more for less' | |
| (40 minutes later) | |
| Customers in Northern Ireland pay more for banking and get lower rates of interest on savings, according to the Competition Commission. | Customers in Northern Ireland pay more for banking and get lower rates of interest on savings, according to the Competition Commission. |
| It has published a report into charges imposed by NI's four main banks. | It has published a report into charges imposed by NI's four main banks. |
| The commission found there was a "lack of clarity on charges and unduly complex charging structures". | The commission found there was a "lack of clarity on charges and unduly complex charging structures". |
| An inquiry was set up in May last year following a so-called "super-complaint" from the Northern Ireland Consumer Council and the consumer group, Which. | An inquiry was set up in May last year following a so-called "super-complaint" from the Northern Ireland Consumer Council and the consumer group, Which. |
| Among the complaints were that there are charges levied which are not imposed elsewhere in the UK. | Among the complaints were that there are charges levied which are not imposed elsewhere in the UK. |
| COMMISSION'S FINDINGS Current account charging structures and practices are unduly complexCharges described using unclear terminologyCustomers believe switching accounts is much more difficult and risky than it actually isIn the present state of market competition, the financial incentives to switch are unlikely to outweigh the perceived risks for most customersA customer's decision to switch is more often prompted by dissatisfaction with their existing bank than the recognition of a better offer elsewhereThere is a lack of responsiveness to changes in charges or interest rates It also claimed that the charges appear too similar across the four banks. | COMMISSION'S FINDINGS Current account charging structures and practices are unduly complexCharges described using unclear terminologyCustomers believe switching accounts is much more difficult and risky than it actually isIn the present state of market competition, the financial incentives to switch are unlikely to outweigh the perceived risks for most customersA customer's decision to switch is more often prompted by dissatisfaction with their existing bank than the recognition of a better offer elsewhereThere is a lack of responsiveness to changes in charges or interest rates It also claimed that the charges appear too similar across the four banks. |
| The four main banks in Northern Ireland are the Bank of Ireland, Ulster Bank, First Trust and Northern Bank. | The four main banks in Northern Ireland are the Bank of Ireland, Ulster Bank, First Trust and Northern Bank. |
| Inquiry Group Chairman Christopher Clarke said: "Despite a number of significant recent changes in this market, competition in the provision of personal current accounts in Northern Ireland is still not working for the benefit of customers. | Inquiry Group Chairman Christopher Clarke said: "Despite a number of significant recent changes in this market, competition in the provision of personal current accounts in Northern Ireland is still not working for the benefit of customers. |
| "It's difficult for customers to make comparisons between competing providers due to the failure of the banks to explain sufficiently or fully their unduly complex charging structures and practices. | "It's difficult for customers to make comparisons between competing providers due to the failure of the banks to explain sufficiently or fully their unduly complex charging structures and practices. |
| "It took us many months to understand what the charges are and how they are applied." | "It took us many months to understand what the charges are and how they are applied." |
| He said that during the course of their investigations, three of the four clearing banks in Northern Ireland introduced, or announced that they planned to introduce, "fee-free" banking with no transaction or maintenance charges when the customer is in credit or authorised overdraft. | He said that during the course of their investigations, three of the four clearing banks in Northern Ireland introduced, or announced that they planned to introduce, "fee-free" banking with no transaction or maintenance charges when the customer is in credit or authorised overdraft. |
| SUGGESTED REMEDIES Use easy-to-understand terminology and descriptions of servicesProvide easy-to-understand explanations of the levels of charges and interest rates and how and when they are appliedProvide on each customer statement information on the bank's charges and interest rates and their applicationGive advance notice of charges to customers before they are debited by the bank to a customer's accountRemind customers regularly of their right to terminate their account and switch to another provider Publish customer switching statisticsMake changes to the switching process, possibly by introducing portable personal current account numbers "However, in many cases this means charges have been increased on unauthorised overdrafts," said Mr Clarke. | SUGGESTED REMEDIES Use easy-to-understand terminology and descriptions of servicesProvide easy-to-understand explanations of the levels of charges and interest rates and how and when they are appliedProvide on each customer statement information on the bank's charges and interest rates and their applicationGive advance notice of charges to customers before they are debited by the bank to a customer's accountRemind customers regularly of their right to terminate their account and switch to another provider Publish customer switching statisticsMake changes to the switching process, possibly by introducing portable personal current account numbers "However, in many cases this means charges have been increased on unauthorised overdrafts," said Mr Clarke. |
| Chief Executive of the Consumer Council Eleanor Gill said the report was a "major step forward for consumers". | Chief Executive of the Consumer Council Eleanor Gill said the report was a "major step forward for consumers". |
| "The Competition Commission has undertaken a rigorous 16-month investigation into the banking practices of our big four banks," she said. | "The Competition Commission has undertaken a rigorous 16-month investigation into the banking practices of our big four banks," she said. |
| "What they have decided at the end of that is that there is a lack of competition and it is not working for consumers." | "What they have decided at the end of that is that there is a lack of competition and it is not working for consumers." |
| The Ulster Bank said in a statement it was "disappointed" as they believed competition in the personal current account was working. | The Ulster Bank said in a statement it was "disappointed" as they believed competition in the personal current account was working. |
| "Ulster Bank has always gone to great lengths to make its information for customers easy to understand. We are pleased that the commission has recognised this and welcome its focus on transparency in communication with customers," a spokesperson said. | "Ulster Bank has always gone to great lengths to make its information for customers easy to understand. We are pleased that the commission has recognised this and welcome its focus on transparency in communication with customers," a spokesperson said. |
| The Northern Bank said the "vast majority" of its customers did not incur any charges on their personal current accounts. | |
| "We believe our charging structures are straightforward, and our customers have in fact benefited from the reduction or removal of a number of fees and charges in recent years," it said. | |
| Bank of Ireland said it believed the commission's investigation "has helped draw people's attention to the wide range of choice available from the 19 providers currently in the Northern Ireland market". | |
| "Having recently announced the removal of transaction and other charges - which will apply automatically to all new and existing customers - we have also taken an initiative to proactively inform our customers of how to avoid charges for unauthorised borrowing," it said. |