Virgin Money says there's no such thing as free banking and competition isn't working in our interests

Jayne-Anne Gadhia from Virgin Money. Credit: ITV News

Every month your salary goes into your current account, your direct debits come out of your current account and you don't pay anything for the privilege. What's not to like?

Plenty, according to Which? In their view there's no such thing as free banking and competition between the banks isn't working in our interests.

Which? has today called for the banks, like the energy companies, to be subjected to a full, independent investigation by the newly formed Competition and Markets Authority (CMA).

The "Big 6", in this instance, are Lloyds Banking Group, Royal Bank of Scotland, HSBC, Barclays, Santander and Nationwide. Chances are you have a current account with one of them. According to Mintel, they have 95% of the market.

Which? says this amounts to a "stranglehold" and without further action there's no prospect of the situation changing.

There has been concern about the way banks run current accounts for years. Last September a "seven day switch guarantee" was introduced in an attempt to empower customers and shake things up.

The number of people switching has since risen but Which? calculates that only 4% of us will change banks this year, a rate its executive director, Richard Lloyd, told me was "woeful".

The big banks take a different view. They point out there are 30 different current accounts on the market and therefore choice in abundance. They argue that low switching rates are evidence that we're happy with service we're getting.

Wading into all this comes Virgin Money, the bank formerly known as Northern Rock.

Later this year Virgin is launching a current account of its own. Perhaps surprisingly, it is backing Which? in calling for the whole industry to be referred to the CMA.

The chief executive, Jayne-Anne Gadhia, says low switching rates are down to a combination of anxiety and apathy.

"People worry about losing a standing order", she told me "and they don't realise they are losing out on the interest on their balances. Big banks are using their money for free to lend out as mortgages and credit cards".

Jayne-Anne Gadhia doesn't think competition between banks will work properly until we are allowed to switch and keep our bank details in the same way that we keep our mobile phone numbers. "An account number and sort code for life" is what she wants, the big banks say it would be too expensive.

Virgin Money is a challenger bank, keen to steal business from its rivals. By all means be sceptical but Ms Gadhia's views chime with those of politicians and regulators.

The share of customers at the big banks has remained strong since the 2007 crisis. Credit: Mintel/Office of Fair Trading

Last January the big banks were spared a full-blown inquiry on the grounds that RBS and Lloyds were in the process of off-loading almost 1,000 branches and that the seven day switch guarantee was being introduced.

The CMA is conducting yet another review of the current account market and will deliver its final decision on competition in the autumn. Which? has seen enough and wants immediate action.