British banks face charges inquiry

Britain's banks are facing a wide-ranging investigation into the charges they impose on their customers.

Britain's banks are facing a wide-ranging investigation into the charges they impose on their customers.

The Office of Fair Trading (OFT) will carry out an investigation and will report back at the end of the year.

It claims a lack of transparency means that while banks make record profits, their customers could be getting a raw deal.

"I think we have to move away from the myth that banking is free, it is not free," John Fingleton, OFT chief executive, said.

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"Some people pay quite a lot, others less but until it's clear how much we're paying it's very difficult to work out how to make competition work better".

The investigation will also look at default charges - the fees banks imposes for, say, exceeding an overdraft limit. By law the charges should only cover the bank's costs.

The banks insist their default charges are avoidable, fair and lawful.