The Competition and Markets Authority has said it will consider comments made by MPs after being branded “lazy” over its report into the banking market.
The CMA has published its interim report on why so few people switch bank accounts and last week some of the people behind the review appeared before the Treasury Select Committee.
But committee chairman Andrew Tyrie was unimpressed by the CMA’s inability to say how much it costs a bank to run current accounts and how much savers pay for them.
Speaking after the hearing, Mr Tyrie said: “The public have concluded that they have been ripped off by banks for years, and there is a good deal of evidence that many of them may be right.
“Customers should be told how much they are really being charged. People deserve at least this much from their banks.
“The CMA has fallen short of suggesting ways of doing this – something people take for granted with the purchase of almost any other product or service.
“Until customers have the information they need to vote with their feet, competition in retail banking will remain elusive.”
The CMA will now reconsider its findings and recommendations before publishing its final report in May 2016.
Its investigation found 57 per cent of consumers have been with their personal current account provider for more than 10 years, and 37 per cent for more than 20 years.
On average, the CMA’s research found, current account users could save £70 a year by switching.
During the select committee hearing, MPs questioned Alasdair Smith, the chairman of the retail banking investigation, about the costings for a current account.
Conservative committee member Mark Garnier said: “I am stunned that you haven’t even asked the question of the banks of what is their cost per customer on a very simple management metric.
“The answers you are coming up with seem to be lazy. I understand it is a complex thing to unwind, but you don’t seem to have challenged them at all.”
Mr Smith said: “Giving me as the customer of a bank information about how my bank allocates its fixed costs between its personal accounts, its smaller business accounts and its other activities is not going to help me be a better informed customer.”
Adviser view
Matthew Harris, director of Fife-based Dalbeath Financial Planning, said: “We are sometimes asked by people who are not happy with their bank account who we would recommend and it is difficult to make a recommendation. I am not sure what more information could be given to advisers.”
