FCA think Brits are getting a bad deal from the banks

bank_sign If you're the kind of person that doesn't know the answer when questioned where a bear drops its guts, then this will be news to you - in Britain, the banks aren't very good and giving everyone lousy deals. For the rest of you, the Financial Conduct Authority's latest findings will have you wanting to hand out PHDs in stating the obvious.

So what's the news?

Well, people in Britain are getting poor value from a lot of cash savings accounts, finding it difficult to switch to a better deal. Are the FCA going to ban some practices? Of course not.

They say that it should be easier to compare and switch between accounts in a market that's worth £700 billion, where six providers have around two-thirds of all balances. The FCA would like to see switching made easier and quicker, with more timely information about pending changes in interest rates that will happen if people look elsewhere.

This report came about after the regulator came under further pressure to sort out a market that is effectively run by HSBC, Lloyds, Barclays, RBS and Santander UK. The FCA found that 'the big five' pay on average "materially" lower rates on easy access savings accounts than smaller rivals.

"In a good market firms should be competing to offer the best possible deal and consumers should have the information they need to help them shop around," Christopher Woolard, the FCA's director of strategy and competition, said. The regulator have offered some changes, including greater information on interest rates and lowering the current 15-day switching time for cash accounts.

The watchdog also has concerns about teaser rates, which offer a higher interest as an introductory offer, which then tapers off.

Of course, they haven't hinted that they'll force the hands of the banks and indeed, gave no schedule for these changes. The FCA won't be making providers offer the same interest rate to customers, either.

So basically, what they've done is release a report which says 'Hey! We've noticed what you've noticed! Bit rubbish isn't it?' Time to start flexing your muscles a bit, FCA.

What do you think?

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