12 March 2007
Current account holders are proving to be increasingly fickle towards their providers after research revealed that 83% of them would switch banks if charges were brought in.
Brits have enjoyed 'free banking' for the past 23 years, but recent upsets in the financial industry, including the Payment Protection Insurance policy problems, the OFT's decision to cap credit card charges at 12% and consumers' bad debts has led to some of the major banks declaring that they may begin to charge consumers for holding a current account.
Research, gathered from the price comparison and switching website uSwitch.com also revealed that while 65% of the 18.96 million people that have incurred some form of bank charges have disputed these fees at some point in time, only 48% have successfully received a refund.
Nick White, Director of Financial Services at uSwitch.com commented: "The Financial Ombudsman Service has recently claimed that it was receiving 5,000 complaints a day about 'unlawful' bank charges with a spokesman saying that the number of complaints was unprecedented and has 'even eclipsed mortgage endowment complaints'.
The fact that the big banks are divided on the charging issue will prompt consumers to reconsider their loyalty to their current account holders, with Barclays stating it was "determined" to continue 'free banking' and Nationwide declaring that charges were needed to provide a "fairer proposition" for all of its customers.
Banks who do decide to introduce current account fees will be at risk of losing out to those who aren't and Mr White predicts that consumers will not hesitate in switching their providers, adding: "we are in little doubt that the introduction of banking fees will be one of the biggest triggers for current account switching that we've ever seen."
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