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OFT To Hit Banks With Greater Regulation

In a move which is sure to send shockwaves throughout the banking industry it has been reported that the average UK consumer is paying £152 a year for their free banking services. More worryingly it has also been revealed that the less well off are actually subsidising the wealthier bank customers, something which has never actually been raised until now.

The UK banking industry is making £2.6 billion a year from customers who have insufficient funds to cover directs debits, cheques, etc. The banks are also making £4.1 billion a year from interest on customer deposits and when added to other income streams, the banking sector is taking the UK consumer for a £8.3 billion a year ride!

Unless the banks introduce tighter codes of practice and make customers fully aware of the service they are paying for, the OFA has threatened to redefine the regulatory framework of the sector and bring the sector to heel. This is all prior to the outcome of the bank charges case which will be reviewed very shortly, with the potential to literally wipe out income streams in excess of £10 billion for the UK banking sector.

Quite how the future regulatory framework will be defined is in the hands of the major high street banks, for now.

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