Bank charge proposals branded weak
Consumer watchdog proposals to overhaul the future of UK bank charges have been slammed as "weak" and "pointless".The Office of Fair Trading (OFT) said banks had pledged to make significant changes to overdraft charges over the next two years, including offering customers greater ability to "opt out" of overdraft facilities.
But consumers groups criticised the OFT for relying on banks themselves to make changes, complaining consumers will still be left vulnerable to potentially sky-high fees.
Reporting back after a three-year investigation, the OFT said banks had committed to introducing options for those who do not want unarranged overdrafts as well as greater choice surrounding charging structures.
It said there had already been "substantial changes" since it launched its probe.
Fees for bouncing a cheque or other payments have fallen from around £34 in 2007 to £17, while charges for processing a payment for a customer in the red without prior agreement have dropped from £30 in 2007 to £22, said the OFT.
However, its recommendations have not gone far enough, according to consumer groups.
Consumer Focus called for statutory legislation and for overdraft facilities to be opt-in and not opt-out.
It said: "Today's announcement relies on the banking industry to fix the problems it has created. This settlement still leaves consumers vulnerable, with no firm commitments from banks."
The Financial Services Consumer Panel added that the report was "too weak and will take too long to deliver real improvements".
Fees for bouncing a cheque or other payments have fallen from around £34 in 2007 to £17, while charges for processing a payment for a customer in the red without prior agreement have dropped from £30 in 2007 to £22, said the OFT.
However, its recommendations have not gone far enough, according to consumer groups.
Consumer Focus called for statutory legislation and for overdraft facilities to be opt-in and not opt-out.
It said: "Today's announcement relies on the banking industry to fix the problems it has created. This settlement still leaves consumers vulnerable, with no firm commitments from banks."
The Financial Services Consumer Panel added that the report was "too weak and will take too long to deliver real improvements".
© 2012 Press Association