Bank charges 'lead people into debt'
Published On 2 July 2007
Unfair bank charges on current accounts are pushing venerable consumers towards debt and the need for things like IVAs, a new report suggests.Recently, the Office of Fair Trading (OFT) launched an investigation in to how and what banks charge on current accounts.
Responding to the investigation, the National Consumer Council (NCC) has said that banks must become more transparent and provide clearer information to consumers in order to prevent more people getting into debt.
"Navigating through the current account jungle can be a real challenge," explained Ed Mayo, chief executive at the NCC. "People are reluctant to switch because they are either worried about standing orders and direct debits not being paid, or feel that the process is too complicated.
"Those on low incomes or with limited banking experience are most likely to be adversely affected.
"It's time banks stopped pulling the wool over people's eyes and started behaving more responsibly."
To improve the situation, the NCC has called on banks to make sure that statements clearly contain important information like which interest rates are being charged.
However, the divisional director at Nationwide, Jeremy Wood, said that some banks were working to make the system as transparent as possible.
