Competition Authority to probe banks

The Norwegian Competition Authority will begin a comprehensive investigation of banks and insurance companies after receiving high levels of customer complaints.

Spokeswoman Elin Kleven told the web site Nettavisen that the authority would be taking a close look at how openly competitive these organizations are and would chart circumstances that could limit competition between banks.

Recent complaints about banks have centered on accusations that they have not passed on savings from interest rate reductions to customers.

Kleven said that many customers felt banks were unclear about their services and pricing, and that there was widespread discontent about the difficulty of moving a loan from one institution to another. This can be associated with the practice banks have of binding customers by providing packages of services commonly called a 'total customer' plan.

"The 'total customer' concept is clearly a factor in giving people the feeling that it is difficult to switch banks. We are concerned that banks and insurance companies behave in a way that does not constrain customers," Kleven said.

Norway's Consumer Council greeted the news of the investigation jubilantly, having long complained about the current system of charges and interest rate setting by banks.