Millions may decide to switch banks
According to a recent report from consumer group Which? millions of UK consumers may end up switching bank accounts in the future if monthly or yearly bank charges are introduced for those with bank accounts.
Which? conducted a survey of 1022 people, and out of the respondents nearly 80% stated that would look at switching to another bank. Around 73% stated that they thought that fees charged on current accounts would be unfair. However, banks have indicated that these fees are a possibility in the event that they lose the right to impose charges for exceeding overdraft limits, bouncing cheques, and for returned direct debits.
A High Court test case is scheduled for next year to determine the legalities of these charges, which have been at the centre of controversy for the past couple of years. If the banks lose the case then many banking customers could be hit with high monthly or annual fees simply for having a bank account. Nearly 90% of those polled by Which? added that the government needed to ensure that caps were placed on any such account fees.
An official from Which? stated: “Consumers don’t want to be charged for their current account and will vote with their feet if their bank introduces a monthly or annual fee. Our research shows that customers would support Government intervention to make sure banks don’t overcharge.”
A spokesman from the British Banker’s Association said: “UK banks offer the most cost effective and comprehensive package of current account services around and are keen to continue to do so. We have always said there is a place for the current model of free banking and part of the reason for seeking the clarity of a court decision on bank fees is to defend this.”
Tom Smith
14th November 2007
