Watchdog urged to force Big Four to start charging for their services

Tesco Bank and Virgin Money are spearheading a campaign to force banks to introduce monthly fees for current accounts. The two ‘challenger’ banks were the only two current account providers that told the Competition and Markets Authority that customers need to pay in order for competition to thrive. The CMA has indicated that it plans to look at charging as part of its review of retail banking, but any decision to force banks to set monthly fees for accounts is likely to be unpopular. Lloyds Banking Group told the CMA it thought free bank accounts encouraged competition because customers could have several accounts open at any one time without incurring extra charges – enabling them to sample the level of service at different banks. However, Tesco said free in-credit banking ‘creates a barrier to entry which is very difficult for new entrants not to conform to in order to compete’. It added that it thought the perception that accounts were free led to ‘a lack of customer engagement in assessing what value they derive from their account’.....Read more here