Market study into personal current accounts
16 July 2008
The OFT has published its market study report into personal current accounts (PCA) in the UK.
The report found that much of banks’ revenue from current accounts is derived from largely hidden charges, with 81 per cent of income coming from insufficient fund charges (£2.6bn) and net credit interest income (£4.1bn). Yet a significant number of customers do not know how much they actually pay in bank charges, either before or after they are incurred, and more than three quarters do not know the credit interest rate of their current account.
Download Personal current accounts in the UK - an OFT market study (1.2 mb)
Download the executive summary (146 kb)
Download annexes to report (all pdf files):
Annexe A - Legal and regulatory framework (187 kb)
Annexe B - Summary report of review of information banks provide to consumers and of price comparison sites (101 kb)
Annexe C - Free-if-in-credit personal current accounts (250 kb)
Annexe D - Personal current account consumer research (589 kb)
Annexe E - Psychology of personal current accounts (170 kb)
Annexe F - Public policy context (87 kb)
See press release
Download market study questions and answers (103 kb)
The OFT has now launched a consultation exercise to invite comments from stakeholders on the high level concerns identified in the report.
Download Personal current accounts market study - a consultation paper (137 kb)
Background and timeline
15 November 2007
After reviewing interactions with court proceedings and taking legal advice it has been decided that the findings of the market study into banks will not be published in advance of the test case.
See press release
26 April 2007
The OFT launched a market study into personal current accounts in the UK.
The main factors that have influenced the OFT's decision to proceed to a market study are:
Download reasons for market study (pdf 131 kb)
See press release
Outcomes
The outcomes the OFT wishes to achieve are:
29 March 2007
The OFT has announced an in-depth study of retail bank pricing.
See press release
16 July 2008
The OFT has published its market study report into personal current accounts (PCA) in the UK.
The report found that much of banks’ revenue from current accounts is derived from largely hidden charges, with 81 per cent of income coming from insufficient fund charges (£2.6bn) and net credit interest income (£4.1bn). Yet a significant number of customers do not know how much they actually pay in bank charges, either before or after they are incurred, and more than three quarters do not know the credit interest rate of their current account.
Download Personal current accounts in the UK - an OFT market study (1.2 mb)
Download the executive summary (146 kb)
Download annexes to report (all pdf files):
Annexe A - Legal and regulatory framework (187 kb)
Annexe B - Summary report of review of information banks provide to consumers and of price comparison sites (101 kb)
Annexe C - Free-if-in-credit personal current accounts (250 kb)
Annexe D - Personal current account consumer research (589 kb)
Annexe E - Psychology of personal current accounts (170 kb)
Annexe F - Public policy context (87 kb)
See press release
Download market study questions and answers (103 kb)
The OFT has now launched a consultation exercise to invite comments from stakeholders on the high level concerns identified in the report.
Download Personal current accounts market study - a consultation paper (137 kb)
Background and timeline
15 November 2007
After reviewing interactions with court proceedings and taking legal advice it has been decided that the findings of the market study into banks will not be published in advance of the test case.
See press release
26 April 2007
The OFT launched a market study into personal current accounts in the UK.
The main factors that have influenced the OFT's decision to proceed to a market study are:
- the significance of personal current accounts to consumers and economic growth
- complaints about the level and incidence of current account charges
- low levels of price transparency
- limited extent to which consumers help drive competition in the provision of personal current accounts.
Download reasons for market study (pdf 131 kb)
See press release
Outcomes
The outcomes the OFT wishes to achieve are:
- active and informed consumers who drive competition among banks, which in turn delivers efficiency in supply and value for consumers
- banks treating consumers fairly and well within a coherent self-regulatory framework and through compliance with the regulatory framework, thereby pre-empting high levels of regulatory intervention.
29 March 2007
The OFT has announced an in-depth study of retail bank pricing.
See press release