Consumers against end to free banking

Earlier this year Lord Turner, the chairman of the Financial Services Authority, called for an end to free banking over concerns that the model stifles competition in the banking industry.

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As the debate surrounding free banking rages on, consumers have voiced their opposition to the move in a recent uSwitch.com survey.

Three quarters of Brits surveyed argued that they are against the idea of being charged for their current account, while 81% said that they feel even a small fee wouldn’t be appropriate.

Further findings from the research revealed that 16% of consumers felt that they wouldn’t be able to meet the costs of holding a bank account.

Almost a third of consumers felt that they would have to rethink having a current account at all if the charges were introduced.

While rationale behind the end of free in-credit banking is an attempt to increase transparency within the industry and lead to greater faith in the banking industry, it appears that consumers are yet to be sold on its advantages.

More than half believe the initiative would just be another attempt by banks to increase their profits, while 95% feel the charges would do little to professionalise the sector.

“The end of free banking would be a double-edged sword – what we gain in simplicity and transparency we lose in financial exclusion. There is a real danger that many consumers will be priced out of the current account market,” Michael Ossei, personal finance expert at uSwitch.com.

“The fact is that those without bank accounts tend to end up paying more for household bills, goods and services – they are often excluded from the best deals and have to resort to more expensive payment options instead.”

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Posted by: WarrenWilson Categories: Finance Tags: , 2 Comments

2 Responses to Consumers against end to free banking

  1. avatar Martin Day says:

    Free Banking???!!! The grubby little men in banks make a fortune out of investing my money. This is just another money grabbing scheme.

  2. avatar Shig says:

    Banking is never really “free”. If we leave money in our current accounts, we get little to no interest. If we borrow money we pay ridiculous interest. The banking model is skewed so far in favour of the banks that it’s insulting that they think we should pay them for the shoddy service they provide. They are the ones who sought to control the world’s money supply; now they have it, they can at least pay the fucking running costs.