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The Competition and Markets Authority (CMA) has been conducting an investigation into personal current accounts since November 2014 and it’s now set to publish its preliminary findings this month (October 2015).

With possible rulings including an end to “free in credit” banking or a breaking up of the big banks, we’re taking a look at what’s likely to be announced and how it could have an impact on the way your current account works.

CMA investigation

We told you all about the investigation when it first launched but in case you don’t remember, the inquiry is looking at how the big banks in the UK take care of their customers – whether they have too many different charges, lack transparency in the way they charge, if they make it difficult to switch to another provider and if their customers are satisfied with their service. A key concern is whether consumers really understand the costs of “free in credit” banking – for example interest forgone on non-interest bearing accounts, or how overdraft charges impact a minority of customers. It’s also meant to take a look at why the majority of personal current account customers don’t switch more frequently.

Ahead of the provisional findings being published later this month, consumer group Which? has spoken out and urged the CMA to completely overhaul the current account market. It wants to ensure that banks treat their customers fairly and offer more support when they go overdrawn so they don’t rack up big bills.

Which? also suggests that the worst providers should be ‘named and shamed’. This would encourage banks and other account providers to do all they can to keep customers satisfied and it would also give people more of an incentive to switch if they weren’t happy with the service they were getting.

What it means for you

It’s still not clear exactly what will be set out in the CMA investigation’s preliminary findings. There had been some speculation that the four big banks – HSBC, RBS, Barclays, and the Lloyds Banking Group – could be ordered to break apart, but this seems fairly unlikely at this stage. It’s also a possibility that current accounts could start to move away from so-called ‘free in credit banking’, where the account doesn’t have a monthly charge but fees are applied for going overdrawn or paying bills late.

Tesco Bank has proposed a traffic light system, similar to the one currently seen on food packaging. This would mean banks would have to show a red light if their accounts have high hidden charges, which would encourage them to be more upfront about their fees.

If you’re looking for an account without any hidden charges, the thinkmoney Current Account could be for you. It’s designed to help you with your budgeting as the money for your regular bills is kept separately from your spending money. There’s just one monthly management fee of £10 – or £15 if you want a joint account – but there are no unexpected charges for overdrafts or returned items. You can find out more about the thinkmoney Current Account or apply online.

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