Banks threaten to end free current accounts

Banks in the UK have threatened to put an end to free current accounts for consumers after they were accused of imposing stealth charges and ripping off customers during severe criticism from the Office of Fair Trading, which slated practices that earn the banks over eight billion pounds a year from current accounts.

According to the OFT consumers have been paying over £150 each on average in overdraft and other fees, which in effect means that they are not receiving free banking. The OFT has also warned banks that they need to change the way in which they charge for their account services.

However, banks have now said that if they have to cut their fees they will look at charging as standard for current accounts. Many are concerned that banks could start charging between £5 and £20 by way of an account fee for current account holders.

An official from the British Banker’s Association said: ‘It is important that this model, which is what customers have asked for - free for their normal banking, does remain. We are worried that the OFT seems to be challenging that.’ She added: ‘Do you really want to pay for ATM use, pay for statements, pay for direct debits in this country?’