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Comparing cost of current accounts 'virtually impossible'

Current account providers are using baffling charging structures that make it almost impossible to calculate and compare the cost of slipping into an unauthorised overdraft, according to consumer group Which?

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Government 'clear' on current account charges

In response to a Which? study that concluded it is "virtually impossible" for people to calculate and compare current account costs, the Government said it is "clear" that customers must have easy access to clear information on overdraft charges.

It confirmed that a "more robust regulatory system" will be in place soon.

Through the midata initiative the Government is encouraging banks to give consumers information about their spending patterns so they are able to find the best deal for them.

They already have access to free text alerts when a balance falls below a certain level, a free seven day current account switching service, while a more robust regulatory system that will help deliver for consumers will be in place soon.

– Government spokeswoman

Read: Watchdog calls for simpler current accounts

Overdraft charges 'virtually impossible' to calculate

Baffling terms used by current account providers to describe unauthorised overdraft charges include "informal","unplanned", "unarranged" and "unapproved", Which? found.

Consumers are faced with a myriad of complicated charges for using an unauthorised overdraft, and it's virtually impossible for people to calculate and compare the cost of running a current account.

It's no wonder so few people switch between banks when you can't easily compare prices.

– Which? executive director Richard Lloyd

Read: Watchdog calls for simpler current accounts

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Watchdog calls for simpler current accounts

Current account providers are using vague language and baffling charges structures making it very difficult to calculate the cost of slipping into an unauthorised overdraft, research from consumer watchdog Which? has found.

Current account providers are using vague language and baffling charges structures, Which? says Credit: PA

The consumer group used 18 volunteers, including a principal inspector of taxes and a retired headteacher, to work out what the cost of an impromptu overdraft would be using a mock statement and charging structures on the bank's website.

The volunteers got just 10 out of 72 calculations correct between them, with the tax inspector getting just one of his four calculations right and the former headteacher getting them all wrong.

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