The Independent Commission on Banking (ICB) is under attack for failing to push for portable bank accounts – a basic reform that campaigners say would free consumers to switch banks and increase the efficiency of the wider economy.
As well as making the financial system safer, the ICB's remit included encouraging competition and consumer choice. But the commission barely touched on the idea of letting bank customers transport their account number if they switch account.
Pressure for the banks to treat consumers better will also increase today with the Treasury Select Committee's call for Royal Bank of Scotland and Lloyds Banking Group to stop restricting basic account holders' access to other banks' cash machines.
Which? argues that the ICB should have carried out a full analysis of the costs and benefits of portable accounts – not just for banks and consumers but for businesses and the Government. The consumer campaign group points out that every time someone changes bank account, government departments such as the Department for Work and Pensions and businesses incur costs and hassle in making sure direct debits are switched properly.
Dominic Lindley, a policy adviser at Which?, said: "Although portable accounts would have costs for the banks, there would be benefits for every business in the country, for government departments and, of course, for consumers because it would be far less likely for things to go wrong. "No one in business or the Government has really picked up on how much it costs when people switch bank accounts. No one has done proper cost-benefit analysis for a long-term plan."
Instead of calling for portable accounts, the ICB recommended a redirection service. Which? says this will help smooth switching but will do little to reduce costs or overcome people's wariness about the potential for things to go wrong when changing banks. Its survey of consumers found that 43 per cent would be more likely to switch their current account if they could keep the same account number.
Which? argues that the banks will sit back unless they are forced to make changes by a regulator. Mr Lindley said he hoped the new Financial Conduct Agency, due for launch by early 2013 with encouraging competition as part of its remit, will look at the issue.
The financial crisis and reform efforts have turned attention not only to banks' risky practices but also to their treatment of banking customers.
The chairman of the Treasury Select Committee has today written to Royal Bank of Scotland and Lloyds Banking Group raising concerns about their decisions not to let basic account holders use other banks' cash machines.
Andrew Tyrie, chairman of the committee, said: "This change threatens to leave many basic account holders at the two banks unable to access most cash machines in the UK. This could also signal the end of universal access to cash machines for all customers."
RBS announced its plan to restrict cash machine use for basic account customers in August. Lloyds already had limits in place.