So, the Office of Fair Trading has reported that 81 percent of UK banks’ £8billion annual revenues come from two sources: insufficient funds charges (£2.6bn) and net credit interest income (£4.1bn). It also said that, often, these charges weren’t clear enough. This lack of transparency and the complexity of the charges, the OFT says in its report ‘Personal accounts – a market study’, means that it is difficult for customers to compare the market and switch banks.
John Fringleton, chief executive of the OFT is also quoted as saying that unless the banks played ball, it would be hard to avoid regulation. Regulation would increase openness and competition by making fees and charges more transparent, giving customers the opportunity to make sure they are getting the best deal.
But while the OFT report shows that the UK banking industry is underpinned by these fees, it is not alone. The fees charged by energy brokers for finding businesses the most competitive deal on their electricity and gas contracts are also the foundation of the industry – they did tell you about their fees when you last renewed your supply contracts, didn’t they??! Your energy broker told you they provided a free service? They spend time finding you the best energy deal and don’t expect a penny in return – sounds too good to be true if you ask me – and doesn’t sound like a sustainable business model either!
Next time someone tells you that something is free you might want to check the small print… You might also want to investigate whether you really are getting the best deal next time you come to renew your energy contracts. Oh, and if you want to find out how much your brokers fees really are for their supposed ‘free’ service email info@supplierswitch.com - we can help you.
