OFT to investigate bank charges

Current account holders could find their banks’ changing their prices after the Office of Fair Trading (OFT) launched another study into bank practices.

In what is being billed as the most wide-ranging study into personal banking and bank transparency, the OFT will examine free banking, consequences of the end of free banking and the fairness of unauthorised overdraft charges.

John Fingleton, OFT chief executive, said: "This will provide the necessary context for assessing the fairness of unauthorised overdraft and returned item charge before we apply the law in this area."

The Citizens Advice Bureau welcomed the OFT announcement, saying that bank charges affect people on low incomes the most and can lead them into a trap of debt which they can’t escape.

But one consumer group thinks banks should act before the OFT reports back.

Ed Mayo, chief executive of the National Consumer Council (NCC), said: "Banks must deliver a fair deal for consumers and stop dragging their customer service reputation further into the mud by waiting for regulatory action."