Trouble for banks in Northern Ireland

It seems there may be trouble ahead for banks in Northern Ireland. Following a two year investigation by the Competition Commission, banks have been told to make changes to how they offer current accounts. This will please consumer groups who launched a super-complaint to the Office of Fair Trading (OFT) who agreed that complex charging structures and practices were making it hard for customers to make objective comparisons between deals.

The banks were also accused of charging fees on authorised overdrafts, a massive hot potato at the moment. The Commission agreed that customers were reluctant to switch and were paying higher charges and receiving lower credit interest than they could expect in a more competitive market.
In turn, the Commission demanded that banks cut down on jargon, describing current account services in terms of plain English terms that could be easily understood by everyone.

Also required were clearer explanations of charges and interest rates and when they were applied, with a mandatory 14 days notice imposed to notify of any fees due.

Annually, banks are now required to tell their customers that they can switch accounts, with the actual process of doing so to be made much easier and clearer. The banks have been given a year to make improvements with those failing to meet the deadline facing fines. One issue that was not clarified however, is the level of charges on current accounts which is currently under investigation by the OFT.

The current account market in Northern Ireland was traditionally dominated by four clearing banks: Bank of Ireland, First Trust, Ulster and Northern but a number of non-clearing banks have started offering current accounts in direct competition.

The commission concluded that even though there was evidence of improvements since the beginning of the investigation, an unacceptable one in five customers still had an old-style account.