Banks facing customer exodus over chargesMany would switch if charged current account fees

09 November 2007

 

Coins and bank notes

Banks are facing a major customer exodus if they start to charge fees for current accounts, new Which? research reveals.

Eight out of ten of the 1,022 people we polled said they would consider switching to another provider if their bank introduced annual or monthly current account fees.

Seven out of ten believe it would be unfair for banks to charge any additional fees for a current account at the current levels of service they offer.

If banks were to introduce fees for current accounts, nine out of ten people think the government should intervene to ensure they are not excessive.

Overdraft charges

The research follows claims by some current account providers that they will have to start charging monthly or yearly fees if the courts rule that unauthorised overdraft charges are unfair.

Earlier this year the Office of Fair Trading (OFT) and a number of high-street banks announced a test case in the High Court into the legality of high unauthorised overdraft charges.

The OFT believes the charges – which are typically around £30 - are unfair and it is now seeking legal clarification.

Court case

Which? personal finance campaigner Doug Taylor said: ‘This is a clear shot across the bows for the banks – consumers don't want to be charged for their current account and will vote with their feet if their bank introduces a monthly or annual fee.

‘Banks shouldn't need to be forced to treat their customers fairly. Although our research shows that customers would support government intervention to make sure banks don't overcharge for current accounts, we would be very disappointed if it came to that.

‘Banks only have themselves to blame for the damage that the overdraft charges saga has done to their reputation. Which? urges the banking sector to put its customers first.’