Nick Kennett, Director of Financial Services, Post Office Money comments on the findings of the Competition and Markets Authority Review into the personal current accounts market:
“Today’s report from the CMA is disappointing and misses the opportunity of making significant change to the current account market. After months of investigation it merely highlights problems that we have known for some time; confusion around costs and charges, difficulties in comparing accounts, and low awareness of the seven-day switching service.
Its ‘remedies’ are underwhelming, and are unlikely to radically improve competition. The current structure does not work in the favour of consumers and needs to change - the CMA does not address this.
Free-in-credit banking is systemically uncompetitive and rather supports and reinforces the dominant position of the major banks; they are able to cross-subsidise between customer groups, constraining new entrants and challengers and results in poor outcomes for many customers – many do not get a fair deal, and are effectively paying for other people’s accounts. Those who have more difficulty managing their money (and might be more vulnerable) are often hit by significant fees and penalties. They pay for others to have their free account.
“We need to ensure that we do everything we can to put people in control of their finances by providing fair and accessible products and services. We have little hope of inspiring confidence in the switching process until this happens.”
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