Consumer group Which? has called for a 'complete overhaul' of bank accounts and wants the competition regulator to "name and shame" banks who impose high charges.
The Competition and Markets Authority (CMA) is expected to release provisional findings from its investigation into current accounts and banking services to smaller businesses in November.
In anticipation of the findings, Which? is calling for greater transparency regarding charges for services such as overdrafts. The consumer group say only a small minority of people are able to identify banks offering the cheapest overdraft and wants the CMA to consider how people use their accounts and the quality of customer service banks provide.
It is calling for the banks to ensure:
• Fairness: It wants banks to be pro-active in helping customers who regularly use unauthorised overdrafts and increase compensation for poor service.
• Control: Banks should help customers control their overdrafts by notifying them about when they are about to go into the red.
• Transparency: Which? wants the CMA to examine data about the banks so the worst providers can be regularly named and shamed.
Which? executive director Richard Lloyd said, "With few consumers moving their finances to different providers, and the existing big banks continuing to hold substantial market power, the inquiry must look beyond ideas to improve information and switching.
"When it reports next month the CMA should propose changes that will incentivise banks to better respond to the needs of their customers."
Which? isn't the only one calling for changes. Tesco Bank also wants more transparency around bank charges and suggests introducing a traffic light labelling system. Banks with very high charges on accounts would have to be labelled red, as a warning to customers.
"Banks have lost the trust of their customers and it is about time that the industry took concrete steps to restore faith in the sector," wrote the chief executive of Tesco Bank, Benny Higgins.
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