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A new Competition Commission report has found that lack of clarity on charges
and unduly complex charging structures, together with a reluctance among
consumers to switch banks, are restricting competition in Northern Ireland's
personal current accounts market.
This makes it likely that customers will incur higher charges and receive lower
levels of credit interest than they might expect in a more competitive market,
the Competition Commission said.
This is the conclusion of the provisional findings summary report published by
the Competition Commission as part of its investigation into the market for
personal current account banking services in Northern Ireland.
The main providers of these services in the region are Northern Bank, Ulster
Bank, First Trust Bank and the Bank of Ireland.
Inquiry Group chairman Christopher Clarke explained: "Despite a number of
significant recent changes in this market, competition in the provision of
personal current accounts in Northern Ireland is still not working for the
benefit of customers.
"It's difficult for customers to make comparisons between competing providers
due to the failure of the banks to explain sufficiently or fully their unduly
complex charging structures and practices.
"Along with a perception that switching is difficult, time consuming and risky,
this means that most customers can see little benefit in changing providers.
"Without this competitive pressure from customers, banks are likely to levy
higher charges and pay lower rates of interest than might be expected in a more
competitive market."
The report also called for the shortcomings in competition to be remedied by
making sure every bank customer is able to make an informed choice about which
bank account to use, and to be able to see in advance what they will be charged
for.
The report also found the banks, particularly the clearing banks, describe their
charges using terminology that is unclear and, in many cases, inconsistent
between them.
This is particularly true of unauthorized overdraft charges and, to some extent,
ancillary charges.
The Commission said that the final report will be published shortly.
Source:
Getting Paid
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