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Bank account providers criticised by OFT

Banks are not being transparent enough about interest rates and penalty charges for their current accounts, an Office of Fair Trading (OFT) investigation has found.According to the new report, which was released today, UK banks raise more than 80 per cent of their £8 billion per year revenue through interest and penalty fees.Of this total, £2.6 billion comes from the charges, while a further £4.1 billion comes from interest payments.However, the OFT said that banks were often unnecessarily "opaque" on these matters - and should provide clearer guidance.Additionally, the report found that just six per cent of customers have switched their account providers in the last 12 months - perhaps due to this lack of clarity.John Fingleton, OFT chief executive, said: "Personal current accounts are a vital gateway to effective participation in the economy. But this market is not serving consumers well. Customers lack the information they need to choose the best deal, and this in turn weakens the banks' incentives to compete. "There is much the banks could do to improve how the market works, and we hope this report will encourage them to take steps to do so in the near future."

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