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Banks in 'annual report' warning

Additional bank charges levied on customers, such as penalty fees and interest payments, should be listed together in an annual statement so that customers can better know what they're paying.

This is the recommendation of the Competition Commission, which released the proposal to the regulator last week.

Consumers being given such a list would be more likely to switch banks if they think they're getting a bad deal - increasing competition in the sector.

The Competition Recommendation follows research from consumer group Which? that claimed that customers of the 'big five' UK banks could save £220 per year after switching their accounts, the Guardian reports.

Which? Money editor Martyn Hocking said: "Now's the time to ditch your account and get a better deal - and better service - elsewhere."

Penalty charges - which see customers levied fees for exceeding overdrafts, for example - have proved very controversial among consumers and are currently the source of a High Court dispute between banks and the Office of Fair Trading (OFT).

Customers, backed by the OFT, say that the penalties are unfairly high - although banks claim that the fees are necessary for their running costs and are also warned of in initial contracts signed by customers.

A High Court judge will rule on the matter later this year.

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