Below is an extract from OFT press release;

Improvements in the market already seen since the OFT's study and test case began in 2007 include:

• unpaid item charges, levied when a bank refuses to make a payment, falling from an average of around £34 in 2007 to around £17 in 2010
• per transaction paid item charges, levied when an unarranged overdraft is granted, falling from an average of around £30 in 2007 to around £22 in 2010
• the majority of PCA providers now using Faster Payments for standing orders and one off payments
• commitments already secured from the banks to improve transparency for customers about their accounts as well as making it even easier to switch accounts.

The OFT wants this process of market change to continue. Discussions the OFT has held with major PCA providers during the past three months lead it to expect significant developments over the next two years, including:

• greater ability for customers to 'opt out' of being granted unarranged overdraft facilities and the charges associated with them
• more tools available for customers to control their balances and avoid going overdrawn
• better treatment of customers who do go overdrawn and get into financial difficulty.

These improvements will be supported by wider banking industry commitments, announced today, which the OFT welcomes:

• the development of minimum standards to apply when offering customers the ability to opt out of unarranged overdraft facilities
• the development by banks of best practice for customers in financial difficulty who incur unarranged overdraft charges
• an industry working group to develop ways of giving consumers greater control and access to real-time information on their account.

Over the next two years, the OFT will monitor developments in the market, in particular the options available for customers who do not want access to unarranged overdraft facilities, choice around charging structures, the level of unarranged overdraft charges, and the treatment of customers who find themselves in financial difficulty. It will consider further intervention, including recommending legislation, if competition and change fail to deliver the various improvements expected. The OFT will report back in 2012 on the impact of these initiatives.

Advice4debtNI welcome these improvements and hopes that it will help clients in financial difficulties break the cycle of bank charges and avoid getting further into debt.