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LONDON, Sept 9 (Reuters) - Britain's Financial ConductAuthority (FCA) has begun studying competition in thetrillion-pound cash savings market to see if customers aregetting a fair deal.
At the start of the new financial year in April, people arebombarded with advertisements from Britain's major banks,encouraging them to put cash into accounts with favourable taxtreatments.
The FCA, launched in April with a strong focus on stoppingconsumers being ripped off after a string of mis-sellingscandals, said it was looking at the effects of so-called"teaser" or introductory interest rates to new customers.
Some savers leave their money in the account even after theteaser rate has expired and the FCA will look at how oftencustomers switch accounts.
"In looking at cash savings, we will examine an area thataffects most people and see if there is action we need to take.This is exactly the sort of area I want the FCA to be operatingin," FCA Chief Executive Martin Wheatley said in a statement.
The announcement comes as Wheatley prepares to answerquestions on Tuesday from members of Britain's parliament, whoare likely to ask what is being done to protect consumers.
"We know that switching rates are low for financial servicesproducts and savings accounts are no exception. Even when peopledo switch their accounts, they are twice as likely to go withtheir existing provider than move to the offering of acompetitor," Wheatley said.
The watchdog will consider studying annuities, products thatoffered retired people an income, once a review of the sector isfinished by the end of the year. The FCA will also review earlynext year the way competition works between financial servicesfirms to ensure customers get a better deal.
