Tesco promotes transparency in current accounts

Tesco has promised that its current accounts will be about transparency and none of the hidden clauses consumers have become wary of.

Bennie Higgins, the company's chief executive, told the Sunday Herald that Tesco's current accounts will not fall in line with traditional banking.

The corporation will take a customer-first line and its ethos will be based around this concept.

He explained: "The banking sector is dominated by a few key features … A willingness to have products that are not straightforward, that are not simple, that are not transparent and that often punish loyalty and treat loyal customers as inert."

Higgins added that Tesco will break from tradition to provide consumers with a service they will be able to understand easily and comprehensively.

According to a report on British banking, published last year, UK banks made £2.6 billion by charges consumers for offences associated with insufficient funds.

Furthermore, seven of the big banks are currently appealing the Office of Fair Trading's decision to call time on their right to levy excessive bank charges on those who exceed their overdrafts.

Tesco, Higgins says, will not be in the game of using these charges to make a profit and while he concedes plans are in their early stages, the company is committed to paying consumers a decent rate of interest on their savings.

"It will be about the transparency and being very clear to customers what they will get. It will be about finding ways to reward customers for their loyalty," he explained.

"So it is early stages, but I think current accounts are a good example of where there is an opportunity to serve customers well by being more transparent and by being fair."

Tesco plans to open a chain of 30 banking branches, which will create much-needed employment opportunities in a recessionary environment.

The firm has 12 years of personal finance experience behind it in the credit card and insurance markets, which has seen it deal with over six million customers.

Around 7.5 per cent of the credit card market and 4.5 per cent of the car insurance market has already dealt with Tesco, making the firm's decision to offer extended banking services unsurprising.

Tesco's revealed earlier this month that its first quarter sales for 2009 were up by 4.3 per cent, which it called a "solid start" to the financial year.