Watching the bank charges saga unfold over the past couple of years has been a bit like watching Derby County play football. You know they're going to lose, but rather than simply agreeing on a suitable scoreline with their unquestionably superior competitors, the referee insists on the humiliation being played out in front of thousands of people over a full 90 minutes.
Similarly, when it comes to the banks versus the Office of Fair Trading, it's never been in much doubt how it's all going to end: the banks will eventually be told they charge too much, and consumers will finally be allowed to start reclaiming the money they were unfairly charged. The only problem is that it may be years before the court cases are done and, more importantly, years before the Financial Services Authority finally drops its waiver that allows the banks to put all claims on hold for the moment.
This week, the OFT published yet another damning report, exposing the complexity and opacity of the banks' charges, and even threatening to force a new set of rules upon the industry if it doesn't clean its act up soon. To carry on my rather ropey football analogy, you could say it put another hat trick past the demoralised Derby County.
But at this stage, it doesn't really mean anything. We're only halfway through the match, and consumers won't be allowed to claim their victory until it's all over – possibly sometime in 2009, but more likely in 2010.
In the meantime, things appear to be only getting worse. Although a condition of the FSA's waiver was that banks should not be able to change their charges if their was any chance that any of their customers could be worse off, all of the main banks have brushed this aside and pushed ahead with a rehash of their fees over the past 18 months. While they may argue that their new charges are fairer, it's possible to identify scenarios with most of the banks where some of their customers will lose out – something that the FSA expressly said should not be allowed to happen.
Alliance & Leicester, for example, now charges its customers 50p a day for using their overdraft facility, rather than charging a regular rate of interest. Although this works out much cheaper for customers with large overdrafts, it's much more expensive for customers who only occasionally dip into the red by a few pounds. Similarly, Lloyds TSB now has a sliding charging structure for people who bust their overdraft limit – dependent on how much over they go. For some, the charges will work out much higher than they were under its old system.
As the OFT rightly said in its report, the many varied charging structures of the banks have made it all but impossible for consumers to make a straightforward comparison of who has the most reasonable fees. Until now, current accounts have been one of the few financial products that consumers haven't needed to take financial advice about– but if things carry on as they are, consumers will need professional help to navigate this market, too.
I can't help feeling that the FSA is deliberately cutting banks more slack than they deserve right now, because it needs to keep them onside. It has already persuaded the big players to help rescue Bradford & Bingley's ropey rights issue, and if the credit crunch prevails, it may well need their help again.
But these issues should not be related. The regulator's primary responsibility is to protect consumers. And when it comes to consumer banking, it's hard to argue that they're succeeding at the moment.