Virgin Money wants to force big banks to charge customers the real cost of current accounts. This would end the free-in-credit model in the UK which is regarded by some as a key factor in removing barriers to entry because it could prompt consumers to change provider if they paid a fee for their current account, rather than banks covering the costs through opaque charges, such as for overdrafts.
Andrew Tyrie, the chairman of the committee, accused the group of vagueness after its 11-month inquiry produced no clear statistics of the true cost of current accounts. He said that the report’s central idea — that improving price comparison websites would stimulate competition — could be flawed because consumers would have to share their personal data with the websites. That is something they would not be prepared to do, Mr Tyrie said. After an avalanche of criticism from consumer groups and smaller banks, the CMA signalled that it might be prepared to harden its findings in its final recommendations, which are scheduled to be published by May. The body has the power to enforce them irrespective of opposition from various stakeholders, such as large banks.