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Defaqto expects free banking to be phased out

22 February 2007
British consumers could be set to face monthly charges on their current accounts, according to new research from Defaqto.

The group believes that consumer pressure regarding charges, allied to an investigation from the Office of Fair Trading into the level of those fees, will ensure that banks roll out charges within two years.

According to Defaqto, banks are justifying their prospective charges by suggesting that customers who go overdrawn are currently having their charges paid for by those who do not.

David Black, head of banking at Defaqto, said that save for bank accounts for the less well-off, he would be "very surprised" if free banking was universally available in two years' time.

"The first major provider to introduce charges for all customers is going to take a lot of flak but it is likely that the majority of the main providers will then follow the lead," he said.

He said that as a result of account charges, he expected to see a "significant increase in account switching as well as many people closing their secondary accounts".

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