Current Accounts 'To Be More Transparent'

The Office of Fair Trading (OFT) has announced that banks have agreed to a series of measures, including telling customers the size of the fees charged annually on current accounts.

The OFT's announcement follows an investigation into the fees being levied on current accounts when consumers cross their overdraft limits - an industry worth £8 billion.

According to the body, the controversial unarranged overdraft charges market is worth £2.6 billion. It has threatened to impose a crackdown on the practice.

However, it is awaiting the outcome of a Supreme Court judgment on whether unarranged overdraft charges breach the unfair terms and contracts regulation.

If the court rules that they do, then banks could face stricter regulations in this area, which are legally binding.

The announcement of the changes has been welcomed by many of the country’s leading financial providers and regulators. A representative of the watchdog company Which? has also received the OFT's actions positively. He feels optimistic about the banks' promises to make their processes more transparent – even though banks such as HBOS have made similar commitments in the past.

He added: "It's great that the OFT has secured an agreement from the banks to give people clearer information on account charges, average balances and annual statements.

"This is a step in the right direction."

A spokesperson for a leading comparison website also welcomed the news and said it would help consumers make more informed decisions about which current accounts they wanted to take out.

He continued that it is "vital" consumers properly investigate the pros and cons of different accounts and consider the ways in which they are likely to use the product.

The money expert said: "For example, it may be more important for them to have a high interest rate on credit balances, or conversely they may need good terms on overdraft usage.

"The only way they can do this is if banks are open about how their different fee structures work."

Another area the OFT wants banks to clean up their act in is the transference of current accounts. Currently, the watchdog feels the process has been made deliberately troublesome to deter consumers from changing providers.

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