Current account reforms to benefit millions

Changes to how personal current accounts operate will help millions of bank customers to manage their finances and deduce whether they are satisfied with the service they are receiving, the British Bankers’ Association have said.

The association have identified three themes which will improve consumer experience and help Britons better manage their finances. These are transparency, so consumers are clear about what they are to be charged; control, to help consumers take greater control of their finances; and greater measures to help consumers who experience financial difficulties through their current accounts.

Amongst the changes that the largest member banks have promised to provide to full current account holders are:

• alerts, such as text messaging, when account balances approach their agreed limit;
• advance warning of charges incurred and the date when they will be paid;
• discretion, such as a modest ‘grace period’, so charges won't apply if the account goes over by a small amount;
• certainty over when money needs to be paid in to avoid charges.

If they choose, customers will also be able to reject overdraft facilities altogether. The provision for alerts is expected to be available by early 2012, while the other measures are to be phased in by early 2013.

Further major reform, however, will come in the form of a ‘7-day switching guarantee’, which is designed to provide an easy and safe way for people and small businesses to switch their current accounts from one bank to another if they are not happy with the cost or service they have received. Such measures are expected to boost competition across the banking sector.

Does this give you more confidence in the future of current accounts? Why not keep on eye on Which4U's current account listings to see how the changes begin to benefit consumers?

Mark Hornby