The Office of Fair Trading (OFT) has launched an investigation into current accounts, sparking fears among consumers that such action could signal the end to free banking.

Billed as ‘the most wide-ranging study into personal banking to date,’ the OFT aims to consider the current level and incidence of current account charges in the broader context of efficiency, transparency, value and consumer choice.

“This market study will enable the OFT to consider wider questions about transparency and value in the provision of personal current accounts,” said John Fingleton, OFT Chief Executive.

“Our ultimate objective is a competitive retail banking market in which informed and active consumers drive strong competition and high levels of customer service among banks long-term, with minimum regulatory intervention.”

However, a report from financial research company Defaqto in February revealed that free banking could disappear within two years as part of a backlash from banks against consumer and regulatory pressure on charges. (Read More: Free Banking Could Disappear ‘Within Two Years’).

The bank First Direct already charges customers who only have a current account with the bank a £10 a month charge. Customers can pay the charge or pay into that account at least £1,500 each month (internal transfers excluded) or maintain an average monthly balance on the account of over £1,500. (Read More: Charges to Current Accounts Introduced).

With more regulation squeezing bank profits, many predict that current accounts as we know them – free to use, with few charges if you stay within your agreed limits – are set to change radically. As a result of this consumer confusion, new research has revealed that over 2 million customers have switched current accounts in the last six months alone.

The research, published by MoneyExpert.com, indicates that some 2.29 million people ditched their bank in the past six months; banks are losing around 12,700 customers a day.

“Banks and building societies are feeling the pain as current account fees come under scrutiny. Customers are getting the message that you don’t have to just sit there and take it,” comments Sean Gardner, Chief Executive of MoneyExpert.com.

“With banks under threat for overdraft fees, they’re the ones feeling the pinch at the moment. These days people just won’t stand for poor service or for uncompetitive deals.”

A separate study from MoneyExpert.com claims that three-out-of-four British adults (33.6 million or 75%) are now of the opinion that free banking is ‘unfair’ – on the basis that it’s being subsidised by the minority of people who regularly pay penalty fees. It also found that while millions of British adults have paid a penalty fee only one in 20 pays them on a regular basis.

If you have paid any bank charges that you thought were unfair, follow our step-by-step plan to claim your money back – it’s yours, not the banks’ after all. Click Here

Are you in favour of paying for a current account? Should the OFT investigate current accounts? Share your thoughts with others on the Comment on this Article box below.