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Banks told to be more open over interest charges

26 February 2004
The Office of Fair Trading (OFT) has called on banks to change their arrangements for paying interest to customers.

In a report published today the OFT said that banks should be more open about how long transactions take to clear and what arrangements are made for interest payments during the clearing process.

The OFT wants banks to pay their customers interest on money leaving their accounts until it arrives in the payee's account.

Under present arrangements some transactions take two days to go through, during which time neither party receives interest payments.

"Customers, not just the banks, should get some benefit from the float," OFT chairman John Vickers.

"And customers should get clearer information to help guide their choices about banking services."

The announcement of the report comes amid concern that banks are continuing to profit as consumer debt spirals out of control.