The current account market is not transparent enough for customers to be able to make properly informed choices, according a new research by consumer watchdog Which?
The study, which compared 21 current accounts presently on offer, found that falling into an overdraft without permission and getting payments rejected could cost an extra £183 per month for customers of the most expensive account, Bank of Ireland’s Clear Account Level 1, compared to the least expensive account, Halifax’s Reward Current Account.
The research also found that users who use an authorized overdraft for few days per month could be made to pay £120 more per year with Classic Accounts from TSB, Lloyds or the Bank of Scotland, compared to Current Account Directs from Clydesdale Bank or Yorkshire Bank.
Which? executive director Richard Lloyd was quoted by Blue & Green Tomorrow as saying that unless banks make it simple for people to compare the cost of running a current account, the new switching guarantee alone will fail to transform switching rates or significantly increase competition in banking.
"With many households relying on their overdrafts to cope with the rising cost of living, we’re calling on the chancellor to force banks to release information so consumers can make sense of the way they use their account and choose the one that is best for them," Lloyd added.
Banking reform campaign group Move Your Money CEO Laura Willoughby told the news website that they have always known that the banks are fleecing current account customers without giving them the real information to compare.
"Customers should ask their bank for a full list of charges and match it against their likelihood of needing to use them," Willoughby added.