RBS current account 'one of the worst'

l All payments in and out of the old account transferred automatically to the new one.

l Payments that are missed to be redirected automatically for 13 months, any erroneous charges to be refunded.

Britain's banks this week escaped an investigation by the Competition Commission, after the Office of Fair Trading decided to "wait and see" whether changes in the market will improve competition and customer service.

It came as new research found RBS, which faced some angry customers at its Edinburgh meeting on Tuesday, was voted one of the UK's worst current account providers.

The uSwitch.com Current Account Awards were based on the votes of more than 10,000 customers, and the only bank to do worse than RBS was Santander, despite high-profile promotion of its 123 cashback account.

Internet bank First Direct was named top provider by the financial comparison and switching website, closely followed by the Co-op's online arm, Smile, both with an overall approval rating of 78%. The Co-op itself came third on 70%, while Nationwide Building Society was fourth with 63%.

All four scored well across the board, including for the quality of their face-to-face and remote customer service, and for trustworthiness.

Halifax did best of the big high street banks, coming fifth on 45%, one point ahead of Lloyds TSB (Bank of Scotland and Clydesdale were not in the survey).

The findings come amid concerns that competition in Scottish banking is proving hard to stimulate, with the Co-op having pulled the plug on the purchase of 632 Lloyds branches, 180 of them in Scotland. The revived "TSB" bank will now be floated on the stock market if no further buyer emerges, as will 318 RBS branches, mainly in England.

The OFT said it was too early to judge whether the sell-offs, and a new accelerated account switching process (see panel) would shake up the market. But it noted that overdraft costs had come down since the OFT's last inquiry into the market five years ago.

RBS had an overall customer approval rating of just 40%, ahead of last placed Santander on 37%. It scored just 42% for customer satisfaction, 39% for telephone service, 37% for online or email service, 31% for trustworthiness, and only 17% of account holders said they would recommend it to others. It follows RBS's bottom place in uSwitch's survey of credit card customers earlier this year.

RBS chief executive Stephen Hester promised shareholders at the annual meeting that the bank, 82%-owned by the taxpayer, was on the way to becoming "a really good bank".

A spokesman for RBS said: "Putting our customers' needs first is central to everything we do and we're very disappointed by our results. We've worked closely with our customers to develop our current range of online and mobile services, including Pay Your Contacts, Get Cash and Emergency Cash.

"We'll continue to make banking easier by listening to our customers and offering new and helpful ways to bank with us in the future."

First Direct immediately published its own research showing that 44% of bank customers have never switched their current account, 27% have only switched once, and only 4% say they definitely plan to move over the next two years.

Santander today joins the fray with research showing that 31% of those who do plan to switch over the next year have been attracted by account features, such as in-credit interest, text alerts or longer branch opening hours. It claims this shows "growing numbers of people are starting to look at the ongoing value they derive from their bank accounts more carefully".

Santander dismissed uSwitch's findings, saying in a statement that its own research showed "nine out of 10 customers are satisfied with the service they receive". But other evidence supports uSwitch's results. First Direct, Smile and the Co-op were also judged the best three banks by more than 13,000 members of consumers' organisation Which?, with Nationwide ranked fifth after Virgin Money's One Account. Clydesdale was 11th, RBS 15th, Santander 17th and Bank of Scotland 18th out of 18 providers in the Which? survey.

Unfortunately, according to independent financial rating company Defaqto, not all bank switching services are equally good.

Its research revealed that one-third don't have dedicated switching staff, 40% don't allow customers to choose their transfer date, and one-third of those that do apply restrictions.

More than one-quarter won't refund changes incurred during the process, while less than one-quarter automatically contact the old bank to have the account closed after the switch. Around 40% may do this but, again, restrictions apply. The entry of new players into the current account market will also widen consumer choice.

This week the Post Office, which has over 11,500 branches – more than all the high street banks combined – began offering a range of accounts in 27 English outlets in preparation for a UK-wide rollout next year.

The Standard Account is free to operate, can be opened with a deposit of just £100, comes with a debit card and has a competitive overdraft rate of 14.9%. The Control Account costs £5 a month but does not charge for bounced payments, and the Packaged Account, which includes extras such as travel cover, costs £8 a month.

Michael Ossei, at uSwitch, said: "The Post Office's decision to launch a current account next spring will give banks a real run for their money."