OFT launches probe into NI big four banks

Northern Ireland’s big four banks are to be placed under the microscope when the Competition Commission probes their treatment of customers.

The move follows the successful submission of a "super-complaint" by Which? and the Consumer Council. The banks are the Bank Of Ireland, First Trust, the Northern and Ulster Bank.

The OFT said it had found evidence of behaviour among the four largest banks leading to, or demonstrating, weak competition between them.

This includes:
  • imposition of a number of charges when customers are in credit and overdrawn which are not found in the rest of the UK;
  • no active competition on price and there is evidence of parallel pricing behaviour among them, and of possible price leadership and price signalling;
  • no active competition for customers switching accounts.
In addition the OFT said that there appeared to be low levels of switching by customers, both between rival banks and to alternative accounts within the same bank.

Sir John Vickers, OFT Chairman, said: “Our analysis of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition.

“It is now for the Competition Commission to undertake a thorough investigation of the market and, if necessary, to put appropriate remedies in place.”

Sir John said that after having considered the super-complaint and the responses to its consultation on a market investigation reference, the OFT was “of the view that the legal test for a market investigation reference is met”.


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