Bank Fees to Fall as OFT Gets New Powers
Andrew Garfield Financial Editor, The Independent (London, England)
MORE THAN a billion pounds a year could be saved by consumers after the Government announced powers yesterday for the Office of Fair Trading to investigate bank charges.
The move follows a report by the former telecoms regulator, Don Cruickshank, which found that British banks systematically overcharge customers.
When the report was published in March, the Government referred the business banking market to the Competition Commission in line with Mr Cruickshank's recommendations. Yesterday's decision addresses a second key recommendation that the stranglehold of the big four banks over basic banking products, such as current accounts and credit cards, should be broken.
Announcing a three-month consultation on the new OFT powers, Andrew Smith, a Treasury minister, said: "There will be no hiding place for anyone seeking to take advantage of customers dependent on them to carry out essential daily banking transactions such as drawing cash, cashing cheques, transferring money or using standing orders and direct debits to pay bills."
Mr Smith wants to see lower charges for not only transactions made by cheques and plastic but also at cashpoints. Banks typically charge each other up to 30p per transaction to allow rival customers to use their cashpoints when the real cost may only be about 10p.
The move could also see more credit and debit card companies enter the market, as the existing transaction infrastructure open up to new competitors. …