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NI banking sector not competitive

Customers get worse deal than rest of UK


A pile of notes and coins.

Customers of Northern Ireland’s ‘big four’ banks are being stung with higher charges than British customers and receiving lower levels of interest on their savings because of a lack of competition in the sector.

Those are the provisional findings of Competition Commission inquiry into the four main banks in the province – the Bank of Ireland, First Trust Bank, Northern Bank and Ulster Bank,

The inquiry was set up almost 18 months ago after a ‘supercomplaint’ from Which? and the Northern Ireland Consumer Council. Certain organisations can make supercomplaints to the trade regulator, the Office of Fair Trading, which must then seriously consider the complaint.

Our supercomplaint was prompted by concerns that customers were paying charges not imposed by banks elsewhere in the UK and that the charges were too similar across the four banks.

Competition Commission

Today’s Competition Commission report has found that there is ‘a lack of clarity on charges and unduly complex charging structures’.

It says these factors, combined with reluctance among customers to switch their bank, are restricting competition in the market for personal current accounts in Northern Ireland.

Inquiry chairman Christopher Clarke said: ‘Despite a number of significant recent changes in this market, competition in the provision of personal current accounts in Northern Ireland is still not working for the benefit of customers.

‘It’s difficult for customers to make comparisons between competing providers due to the failure of the banks to explain sufficiently or fully their unduly complex charging structures and practices. It took us many months to understand what the charges are and how they are applied.’

Free banking

Mr Clarke said that in the course of the investigation three of the four banks introduced or announced an intention to introduce ‘fee-free’ banking with no transaction or maintenance charges when the customer was in credit or using an authorised overdraft.

He added: ‘However in many cases this means charges have been increased on unauthorised overdrafts.’

Which? competition specialist Alena Kozakova said: ‘We are pleased that the Competition Commission confirmed our observation that consumers in Northern Ireland were subject to high bank charges.  However, we are disappointed that the commission did not go further in analysing these charges to conclude whether or not they were excessive, and if so what could be done to remedy the situation.

‘The CC is right to suggest a number of practical measures to encourage consumers to switch banks but simply giving consumers more information is unlikely to fix the market. In the absence of such switching, the other problems in the market need to be tackled head on. 

‘Consumers in Northern Ireland have been treated badly by their banks for far too long.  Competition in this market is not working well and the findings of this investigation present a great opportunity to give the industry the shake up that it needs.’


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