Loyal customers prove a barrier to new retail banking firms

Bank customers don't like switching their current accounts to new competitors. Small banks are struggling due to a customer unwillingness to move their accounts from established firms. New banks are finding it difficult to grow due to the reluctance of consumers to change their bank accounts from their traditional providers, according to a review by the Office of Fair Trading. The survey outlined a number of challenges to prospective entrants to the banking market. Customer loyalty to established brands and the consumer preference to bank with a local branch were two of the main issues that have made it difficult for start-up banks to attract new users.

Npower customers will refund £70 million to overcharged customers

Almost two million customers who were overcharged for their gas by energy company Npower will receive a refund in the coming weeks. The firm will have to give back £70 million after implementing a confusing calculation system three years ago, which resulted in many customers over paying. The company has vowed to contact all those affected within the next couple of months and the consumers involved in the long-running battle against the energy provider will receive an average of £35 each. The firm was initially investigated by industry regulator Ofgem, which resulted in Npower agreeing to repay an average of £6 each to 200,000 customers. However, watchdog Consumer Focus campaigned further causing the company to conduct its own review and calculate the refund figures revealed yesterday.