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Banks face OFT referral unless customer service improves |
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Wednesday, 16 July 2008 |
The Scottish Consumer Council (SCC) has welcomed a pledge by the Office of Fair Trading to give consumers more information to allow them to understand whether they are getting a fair deal from their banks.
The OFT says it will refer banks to the Competition Commission if forthcoming fail to improve the service banks give to current account holders.
In a report from the OFT today, banks are revealed to be earning billions from current account customers; much of that in hidden costs. The OFT says the complexity and lack of transparency of personal current accounts makes it difficult to compare different banks so few switch providers, and those that do can find themselves losing out if it goes wrong.
The findings follow a survey undertaken by the Scottish Consumer Council and passed to the OFT showing consumers were far less likely to switch banks account providers than any other service, while those that did reported problems far more often.
SCC Director Martyn Evans said banks must join the rest of the service sector and work to keep their customers and attract new ones: “Just 6 per cent of Scots switched current accounts in Scotland in our survey, slightly less than in England & Wales and dramatically less than the 29 per cent who moved home insurance provider and the 27 per cent who moved their mortgages.”
The SCC published its report on ‘Consumer Switching Behaviour and Attitudes in Key Markets’ in May. It examined the level of switching, and customer experience, across gas; electricity; internet; mortgage; fixed line and mobile phones; savings accounts; current accounts and home insurance.
“Banks saw the highest proportion of people reporting that the switching experience had been difficult – 18 per cent said it ‘had not been easy’ compared with 7 per cent reporting difficulties in switching their mortgage.
“It gets worse when you break down the Scottish figures by age, wealth and geography. Banking managed to score the lowest level of switching of any category across all utilities and services: only 1 per cent of people aged over 55 had moved their savings account while only 2 per cent of those in this age band had switched current account.
“Having a bank Current Account is fundamental to people being able to be part of modern society. I hope the threat of being reported to the Competition Commission will spur banks into making the Current Account market fairer.”
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