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Which? the powerful consumer magazine, has challenged the big four UK high street banks to stop thinking solely of profit margins and deliver value to consumers through fairer pricing of interest rates on current accounts.
The magazine referred to the situation as a £500 million rip off, and argued that the banks could reasonably pay people at least 20 times more interest when a current account is in credit. In the latest phase of its "No Interest" campaign, Which? also demanded that the payable rates on bank overdrafts be cut radically.
The four banks being targeted are Barclays, HSBC, Lloyds TSB and NatWest, who generally pay around 0.1% on customers' balances when they are in credit. Which says it would like to see this raised to around 2%, while cutting overdraft rates to 10% - knocking almost half off the amount charged by some of the banks in question.
By shopping around, it is possible to find current accounts paying rates of more than 3 4% when in credit and overdrafts that charge less than 9%. Which reckons that if 70% of the customers with the banks mentioned above switched to the best available accounts, the savings could total half a billion pounds each year.
Helen Parker, the editor of Which? said: "Because most people don't switch, the big banks have no reason to change. But customers have the power to make the banks take notice."
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