OFT probes 'free' banking

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The Office of Fair Trading (OFT) has launched an investigation into concerns that banks may be unfairly imposing charges upon their customers.

Along with a market study into current account pricing, the watchdog has launched a formal investigation into charges on unauthorised overdraft use and for returned items.

It warns that 'free' banking may be coming to an end and fears that any rash, suddenly-imposed solution may push banks into deciding to abandon the concept for good.

"The OFT shares public concern about the current level and incidence of charges, but believes any quick-fix solution might have unintended and far-reaching consequences across the sector and for consumers as a whole," it said in a statement this morning.

Today's wider study will investigate the transparency of banks, the "fairness and impact" of unauthorised overdraft charges and the implications for a shift away from 'free' current accounts.

"Our ultimate objective is a competitive retail banking market in which informed and active consumers drive strong competition and high levels of customer service among banks long-term, with minimum regulatory intervention," OFT chief executive John Fingleton said.

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