Current account switching: watchdog says banks must help you find a better deal

You could save £70 a year by switching accounts says competition watchdog, but its report on banks has been branded a white-wash

Changing accounts can save you a packet (PA)

Is this something I should be doing?

Yes! According to the Competition and Markets Authority it could save you £70 a year. The watchdog has published preliminary findings a year into its 18 month probe of the current account market.

Presumably it rapped the banks for their misleading fees and charges which penalise the hard-up who sink into the red?

The banks got off very lightly. The CMA said they should better educate customers about switching but its report appeared to blame consumers for not moving banks. It pointed out that 57 per cent of people have been with the same bank for a decade and 37 per cent for more than 20 years.

That sounds like the report was a bit of a white-wash. Was it?

Judge for yourself by the responses: “These proposals don’t go far enough,” said Which? “The report misses the opportunity of making significant change,” said Post Office Money. “A missed opportunity to really shake up a model which is arguably unsustainable and stifles competition through its lack of transparency,” said PWC.

So what has the CMA actually proposed?

The watchdog said “Banks must address long-term problems and make it easier for customers to take charge of their accounts”. It says potential solutions are requiring banks to prompt customers to review their service at certain “trigger points”. It has also suggested that the online tool Midata could be improved to make it easier for consumers to compare bank accounts. “We think customers need to be put in charge of their banking,” said Alasdair Smith, chairman of the retail banking investigation.

What’s going to happen next?

The CMA’s final report isn’t due until next June which gives concerned commentators six more months to lobby for stronger action. Experts would like to see punishment for banks which don’t treat customers fairly to force them to ensure that current account customers get a decent deal.