British banks need to simplify charges for overdrafts

The Office of Fair Trading have said that British banks need to simplify charges for overdrafts to help make the chequing account market more competitive, because that will allow people to decide who offers the best value in a much easier way.

The OFT haven't gone as far as getting the Competition Commission involved thanks to an imminent account-switching service which lands in September.

However, the consumer watchdog found in that their review of the £9 billion market showed that banks had increased market share since its last assessment and that consumers still don't have much confidence in the switching process, and end up sticking with the bank they've got regardless.

Naturally, the British Bankers' Association is thrilled that this hasn't been referred to the Competition Commission.

The OFT has vowed to keep tabs on the situation, saying that improvements have already been made, with customers now saving £928 million annually from a fall in unauthorised overdraft charges.

"Overall, a combination of a lack of competition, low levels of innovation, and customer apathy in the face of unclear costs and a lack of diversity in the choices of current accounts available mean that this market is not working well for consumers or the wider economy," the OFT said.

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