Banks told: give customers a single statement of charges over a year

Banks told: give customers a single statement of charges over a year

Bank customers across the UK could soon receive an annual summary detailing exactly what they paid in charges and interest, if a Competition Commission proposal is adopted by regulators.

This week the commission, which has spent the past two years investigating whether bank customers in Northern Ireland get a fair deal, concluded the banks should be forced to present their customers across the UK with an annual statement.

It argues that customers presented with a single list of all the bank charges they had paid over the previous year would be more likely to question whether they could get a better deal elsewhere, and possibly switch.

The Competition Commission report came out on the same day that the Co-op published a report claiming half of consumers are unhappy with their bank. Consumer group Which? said those who have accounts with the big five - Barclays, HBOS, HSBC, Lloyds TSB and RBS/NatWest - could typically save £220 a year by switching.

Following its investigation, the commission said this week it wants the following changes made by banks operating in Northern Ireland.

The banks must:

· Provide clear information on the levels of charges and interest rates and how and when they are applied both before, and when, a customer opens an account.

· Provide every customer with an annual summary of the charges they have incurred and of interest paid and received.

· Give customers at least.....continued below

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14 days' notice from the date of their statement before charges and debit interest are deducted from their account.

· Remind customers annually of their right to close their account or switch.

· Introduce improvements to the switching process, including offering a charge-free and interest-free overdraft facility for at least three months.

The commission said the measures relating to better and clearer information must be in place in Northern Ireland by April, with the remainder being implemented by October at the latest.

Christopher Clarke, chairman of the inquiry group, said he hoped many of its remedies would be adopted across the rest of the UK.

"In reaching our decisions, we have worked closely with those on other complementary initiatives including the review of the Banking Code and, most recently, the Office of Fair Trading's market study into personal bank current account pricing - all of which cover the whole of the UK.

"We would expect both the independent review of the Banking Code and the OFT to consider carefully the implications of our conclusions and decisions for their own work."

Meanwhile, people who still have accounts with the big five banks could save money and get better customer service by ditching them and switching to another provider, according to Which? Money.

It found that just nine of the 64 Which? Money best-buy savings accounts, loans and credit cards are available from the big five banking groups.

It said most people could earn an extra £50 a year by switching their current account, and £220 by switching their savings account.

In a recent Which? Money survey, just 40% of Which? members who held a current account with Barclays, HSBC or NatWest were very satisfied with their bank, compared to 80% of Smile customers.