13,000 a day switch banks in backlash over penalty fees

As many as 12,700 customers a day will dump their current account provider - around 2.29 million have done so in the last six months.

The rate is increasing, according to a survey by MoneyExpert.com, with an extra 453,100 moving accounts in the three months to the end of March, compared to the previous quarter.

This comes as the industry faces unprecedented scrutiny over the penalty charges attached to overdrafts.

A ruling from the Office of Fair Trading has indicated that the charges, which can reach £39 for bouncing a cheque or direct debit, amount to an illegal penalty.

As a result, hundreds of thousands have launched claims for a refund of these

charges going back over six years. Many of them are choosing to switch banks as a result. And even if they choose to stay, the banks often take revenge by shutting their accounts.

The big five banks, such as HSBC and Barclays, have been offering big incentives to new customers.

At one time Halifax was offering those opening a new current account a payment of £100.

However, it had to close the scheme early because it quickly signed up all the new accounts it was expecting.

The research by MoneyExpert, which was based on a survey of 2,374, also found that the number moving to a different personal loan provider is on the rise.

Just under half a million more said they had moved to a different loan provider in the past six months, compared to a survey conducted three months ago.

Chief executive of MoneyExpert, Sean Gardner, said: "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. With banks under threat for overdraft fees, they are the ones feeling the pinch at the moment.

"These days people just won't stand for poor service or for uncompetitive deals."

Overall, credit cards remained the hottest area of switching activity for bank customers. Around 14 per cent of respondents said they had moved their plastic provider in the last six months.

The research found that electricity and gas providers are witnessing a similar trend. Some 16 per cent have changed electricity company and 14 per cent their gas supplier in the past six months.