CMA PCA Retail banking investigation presses ahead - 1st report post #14

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

The CMA will publish its final report on the retail banking market investigation by 12 August 2016.
The CMA has also today published its provisional decisions on its review of pre-existing measures – the review of the 2002 SME banking undertakings and the 2008 Northern Ireland personal current account order.

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Interesting letter from some of the challenger banks - they seem a little bit peeved....

Responses to provisional decision on remedies

• Letter from 8 challenger banks (26.5.16)
  • Letter from Professor Alasdair Smith to 8 challenger banks (26.5.16)

Investigation updates

Short updates on the progress of the retail banking market investigation.

• Investigation update (24.5.16)

Notice of intention to operate a confidentiality ring to allow submissions on unredacted version of the update on PCA pricing analysis working paper (24.5.16)

Atom Bank (24.5.16)A group of challenger banks (24.5.16)
Lloyds Banking Group (24.5.16)
Secure Trust Bank (24.5.16)

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Update on personal current account pricing (24.5.16) ( be ready for your head to explode - LOTS of REDACTED figures in this - particularly for cost of unauthorised overdrafts..... and the banks argue PCA pricing isn't complicated ! I have posted a couple tables but you need to read the accompanying text and refer to the appendix to understand what the figures actually mean.

Table 1: Estimated product prices for non-overdraft users per month (Standard and Reward, Year 5 prices including benefits, GB) Brand	Product	Non-overdraft user
Royal Bank of Scotland	Royal Bank of Scotland Reward Account	£3.53
Barclays	Barclays Bank Account with Blue Rewards	£3.39
NatWest	NatWest Reward Account	£3.31
Barclays	Barclays Premier Current Account	£1.89
First Direct	First Direct 1st Account	£0.53
HSBC	HSBC Advance Bank Account (New)	£0.49
TSB	TSB Classic Current Account	£0.43
Bank of Scotland	Bank of Scotland Classic Account	£0.43
Lloyds Bank	Lloyds Bank Classic Account	£0.42
Barclays	Barclays Bank Account	£0.39
Santander	Santander Everyday Current Account	£0.38
Post Office	Post Office Standard Account	£0.36
HSBC	HSBC Bank Account	£0.35
Royal Bank of Scotland	Royal Bank of Scotland Select Current Account	£0.29
NatWest	NatWest Select Account	£0.28
Metro Bank	Metro Bank Current Account	£0.00
Halifax	Halifax Current Account	–£1.07
Halifax	Halifax Reward Current Account	–£1.07
The Co-operative Bank	The Co-operative Bank Current Account	–£1.32
smile	smile Current Account	–£1.40
Nationwide Building Society	Nationwide Building Society FlexDirect Account	–£1.85
Yorkshire Bank	Yorkshire Bank Current Account Plus - 16 and over	–£2.13
Clydesdale Bank	Clydesdale Bank Current Account Plus	–£2.15
HSBC	HSBC Premier Bank Account	–£2.49
Tesco Bank	Tesco Bank Current Account	–£3.39
Nationwide Building Society	Nationwide Building Society FlexAccount	–£3.91
TSB	TSB Classic Plus Account	–£4.38
Bank of Scotland	Bank of Scotland Classic Account with Vantage	–£4.61
M&S Bank	M&S Bank Premium Current Account	–£4.67
Lloyds Bank	Lloyds Bank Club Lloyds Current Account	–£7.30
Santander	Santander 1|2|3 Current Account	–£7.72
M&S Bank	M&S Bank Current Account	–£13.94

Table 3: Estimated product prices for overdraft users per month, Standard and Reward products, average over five years Brand	Product	Product type	Overdraft user
TSB	TSB Classic Current Account	Standard	£16.06
Lloyds Bank	Lloyds Bank Classic Account	Reward	£16.04
Santander	Santander Everyday Current Account	Standard	£14.63
Barclays	Barclays Bank Account with Blue Rewards	Reward	£13.73
NatWest	NatWest Reward Account	Reward	£13.31
Bank of Scotland	Bank of Scotland Classic Account	Reward	£12.97
Bank of Scotland	Bank of Scotland Classic Account with Vantage	Reward	£11.60
Lloyds Bank	Lloyds Bank Club Lloyds Current Account	Reward	£11.55
Halifax	Halifax Reward Current Account	Reward	£11.20
Royal Bank of Scotland	Royal Bank of Scotland Select Current Account	Standard	£11.09
NatWest	NatWest Select Account	Standard	£11.09
Halifax	Halifax Current Account	Reward	£11.06
Barclays	Barclays Bank Account	Reward	£10.73
The Co-operative Bank	The Co-operative Bank Current Account	Reward	£10.72
smile	smile Current Account	Standard	£10.53
Barclays	Barclays Premier Current Account	Standard	£10.29
Royal Bank of Scotland	Royal Bank of Scotland Reward Account	Reward	£10.04
Yorkshire Bank	Yorkshire Bank Current Account Plus - 16 and over	Standard	£9.89
Clydesdale Bank	Clydesdale Bank Current Account Plus	Standard	£9.87
Santander	Santander 1|2|3 Current Account	Reward	£9.54
TSB	TSB Classic Plus Account	Reward	£9.19
HSBC	HSBC Bank Account	Standard	£6.79
HSBC	HSBC Advance Bank Account (New)	Standard	£6.70
Nationwide Building Society	Nationwide Building Society FlexDirect Account	Reward	£6.60
First Direct	First Direct 1st Account	Standard	£6.57
Nationwide Building Society	Nationwide Building Society FlexAccount	Reward	£4.49
Metro Bank	Metro Bank Current Account	Standard	£3.70
Post Office	Post Office Standard Account	Standard	£2.85
Tesco Bank	Tesco Bank Current Account	Reward	£2.33
HSBC	HSBC Premier Bank Account	Reward	£0.92
M&S Bank	M&S Bank Premium Current Account	Reward	–£2.09
M&S Bank	M&S Bank Current Account	Reward	–£11.60

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Metro and Nationwide seem to come out quite well in this.

[EXC]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

I'll have to set some time aside to have a good read.

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

I'm probably not the best person to be reading it as it is based on a LOT of math....

This is interesting

The results for overdraft users are presented in Figure 6, and those for non-overdraft users are presented in Figure 7. It is notable that some brands perform very differently across the two customer segments. Santander, for example, has the lowest satisfaction score among overdraft users and also charges above-average prices. For non-overdraft users, however, Santander is one of the most competitive brands, with below-average prices and above-average satisfaction. Conversely, NatWest has an above-average satisfaction rating among overdraft users, but a below-average rating among non-overdraft users.

[leclerc]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

I'll answer on here so I remember to look at this tomorrow once I get my dunce cap off .

If this is the story of the crap we won't investigate nuffin mate story then it enflamed me a lot.....

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Responses to provisional decision on remedies

• 118118 (15.6.16)
• AIB Group (UK) plc (15.6.16)
• Asset Based Finance Association (15.6.16)
• Association of Convenience Stores (15.6.16)
• Bacs (15.6.16)
• Barclays Bank plc (15.6.16)
  • Barclays Bank plc further response (15.6.16)
  
  
• Baringa (15.6.16)
• British Chambers of Commerce (15.6.16)
• Callcredit Information Group (15.6.16)
• Campaign for Community Banking Services (15.6.16)
• Chartered Banker Institute (15.6.16)
• Community Investment Coalition (15.6.16)
• The Co-operative Bank (15.6.16)
• Danske Bank (15.6.16)
• Defaqto (15.6.16)
• Experian (15.6.16)
• Fairer Finance (15.6.16)
• Financial Data and Technology Association (15.6.16)
• Financial Services Consumer Panel (15.6.16)
• Forum of Private Business (15.6.16)
• FSB (15.6.16)
• Funding Circle (15.6.16)
• Funding Options Ltd (15.6.16)
• The GreenField Organisation (15.6.16)
• Growth Street (15.6.16)
• Handelsbanken (15.6.16)
• Letter from 8 challenger banks (26.5.16)
  • Letter from Professor Alasdair Smith to 8 challenger banks (26.5.16)
  
  
• Lloyds Banking Group plc (15.6.16)
• Member of the public 1 (15.6.16)
• Momentum Financial Technology (15.6.16)
• Money.co.uk (15.6.16)
• MoneySuperMarket (15.6.16)
• Nationwide (15.6.16)
• New Economics Foundation (15.6.16)
• Open Banking Standard Group (15.6.16)
• Payments UK (15.6.16)
• PricewaterhouseCoopers LLP (15.6.16)
• Professor Alistair Milne (15.6.16)
• StepChange Debt Charity (15.6.16)
• Tesco Bank (15.6.16)
• TSB Bank plc (15.6.16)
• Virgin Money (15.6.16)
• Which? (15.6.16)

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Good to see the FSCP still support opt - in to unarranged overdrafts rather than opt-out.

[EXC]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

From today's Times:

Banks play new card in pricing row

Big banks have rounded on the competition authority over its investigation into the current account market, claiming that the inclusion of Marks & Spencer shopping vouchers has skewed its findings.

By taking into account the £10 monthly shopping voucher, plus a £100 one-off voucher given to new M&S bank customers, the Competition and Markets Authority has got its estimates wrong on how much people can save from switching accounts, Lloyds Banking Group and other lenders claim.

In a submission to the authority published on Friday, Lloyds said: “The CMA’s estimates of current account pricing are wrong.”

The watchdog’s analysis of the M&S account is flawed because the offer is no longer available and also because including benefits that are not cash “misrepresents prices” for the whole market, Lloyds said.

Including the vouchers is egregious with the M&S account, which is run by HSBC, because it has led the CMA to think it is the cheapest account on the market, effectively paying customers £13 a month, according to Lloyds.

That, in turn, is said to have distorted the CMA’s estimate of the value of switching and accounted for a third of the total amount that customers could notionally save by moving to a different bank.

Benefits from other accounts should have been stripped out, such as travel insurance, cinema tickets and magazine subscriptions, Lloyds said.

“A customer with alternative travel insurance or who does not travel abroad does not receive any value from an account benefit offering travel insurance,” the bank said.

Its view is shared by other big banks. Lloyds has the largest share of the current account market, with about a quarter of all customers.

The CMA said that it had rejected fundamental changes to the market in favour of encouraging transparency. It will publish its final recommendations, which it has the power to enforce, in early August.

Customers could save £1 billion over five years by making banks publish their upper limits on charges, issue alerts when someone is about to go into overdraft and making it easier to switch accounts, the CMA said.

Banks made £1.2 billion of revenues from unauthorised overdrafts in 2014, the CMA said. Most big banks accept that improvements could be made in the area.

The CMA said of Lloyds’s criticism: “We will take into account every submission we receive.”

This is an interesting admission that could come in handy in claiming packaged bank account fees back...

“A customer with alternative travel insurance or who does not travel abroad does not receive any value from an account benefit offering travel insurance,” the bank said.

Its view is shared by other big banks. Lloyds has the largest share of the current account market, with about a quarter of all customers.

[Celestine]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

I have to agree with Lloyds that non cash benefits should be stripped out.

#firsttimeforeverything

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

• • Nationwide’s comments on Lloyds Banking Group plc’s response to the updated PCA pricing working paper (29.6.16)

Responses to provisional decision on remedies

• BBA (29.6.16)
• BGL Group Limited (29.6.16)
• IPSE (29.6.16)

[EXC]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, has written to the Chief Executives of 13 banks, asking them to provide information about their charges – including paid and unpaid – on both authorised and unauthorised overdrafts, for each type of personal banking account they offer.

The Cruickshank Report in 2000 identified problems with price transparency and the difficulty of comparing products. Almost two decades after this landmark report, these problems remain as bad as ever."

http://www.parliament.uk/business/co...atement-16-17/

[Amethyst]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Isn't this a slight duplication being as banks have just provided all their charges details to the CMA ?

Irresponsibly (IMO) Which? have done a bandwagon jump basically telling customers PDL's are cheaper than OD's. They are quoting RBS's max of £90 for a £100 unarranged OD in a month (£6 a day up to 15 days max charge for any unauth. OD over £10) as being more than a PDL ( 0.8% a day or £22.40 over 28 days per £100 ). Which it is about 3% a day over 28 days if you go £100 over. The percentages change of course if you only go £11 over or if you go £500 over.

Its actually difficult to go into an unauthorised overdraft as DD's are returned rather than paid if it takes you over. A DD returned charge on that account is £6 per item. So if you had one item that would have taken you over by £100 it goes unpaid and costs you £6 for it being returned.

However it is still at the banks discretion and there, obviously in my view, should be a specific opt in to allow banks to use discretion in making a payment if it takes you over your limit.

Be interesting to see the figures on how discretion works.... how many/what kind/value/payee etc of DD's are paid or unpaid if they'd take you into unauthorised OD.

Just the way they have talked about it being 'worse than a payday loan' really annoyed me on the radio this morning.

[enaid]

Re: CMA PCA Retail banking investigation presses ahead - 1st report post #14

Woman on tv earlier dont know who she was says this is done to deter you from going OD as the banks dont want you to really and not to take out a PDA just talk to your bank .