Banks must improve customer services or face 'radical action'
17 Feb 2012
The UK’s banks must take positive action to reform customer services, or risk facing ‘a more radical approach’, the Office of Fair Trading (OFT) has warned.
The Chief Executive of the OFT, John Fingleton, said that despite a number of investigations into personal banking services in recent years, little had been done to improve banking services for personal account customers.
Last year the Independent Commission on Banking put forward a number of recommendations designed to make banking easier for individuals and businesses, including the proposal that account holders should be able to switch bank accounts within seven days, and that any related direct debits or standing orders would be redirected for a year at no additional cost.
However, according to the OFT, even where action has been taken progress has been slow, and concerns remain about the lack of competition in the provision of personal banking services.
Mr Fingleton said, ‘In banking markets, consumers frequently face difficulties in understanding the true cost of running their account and comparing deals from alternative providers’.
Previous statistics from the ICB revealed that the largest four UK banks held 77% of personal accounts and 85% of small business accounts.
Mr Fingleton warned that if evidence of more positive change is not seen from the banks, he will consider referring the industry to the Competition Commission.