Northern Ireland's Banking Scandal!

Bank customers in Northern Ireland are offered particularly awful financial products. However, there is one simple way around this problem.

When it comes to financial services and products, the 1.7 million people who live in the six counties which make up Northern Ireland (NI) get a particularly raw deal.

Indeed, six weeks ago, the Competition Commission warned that the market for personal banking in NI lacks competition and is dominated by four clearing banks: Bank of Ireland (NI), First Trust (part of Allied Irish Banks), Northern Bank (part of Denmark-based Danske Bank Group) and Ulster Bank (part of the Royal Bank of Scotland). These four local banks have a huge market share and own most of the bank branches in NI. This makes it hard for rivals to muscle in, although UK-based banks are trying to do so.

This lack of competition leads to higher charges for everyday banking products and services in NI, because very few customers switch banks, as they believe that it is "difficult, time-consuming, risky and of little benefit", to quote the Commission's report. Also, customers tend to stay loyal to their present bank and are reluctant to lose long-term banking relationships. In addition, they find it difficult to compare products and charges, thanks to their complexity and lack of transparency.

However, I suggest the following rallying call to the customers of Northern Irish banks: "Vote with your feet, because you have nothing to lose but your rip-offs!"

Let me show you what I mean by reviewing four key financial products and services from each of the leading Northern Irish banks:

Bank Accounts

Bank of Ireland (NI) pays credit interest of, at most, a pathetic 0.1% a year before tax, which means that you earn 80p a year (after 20% tax) for every £1,000 in your account. Indeed, some of its current accounts don't pay any interest on credit balances!

First Trust's current account doesn't pay credit interest and has a whole host of daily charges if customers don't stay in credit throughout each quarter. Yuk!

Northern Bank's current accounts pay between 1% and 3% interest.

Ulster Bank's standard current accounts pays (you guessed it) 0.1% a year before tax.

The Fool says: Frankly, when compared to theseBest Buy current accountswhich pay interest of up to 5% a year, these Northern Irish bank accounts stink, so ditch and switch today!

Credit Cards

Bank of Ireland (NI)'s MasterCard Standard charges an annual interest rate of 18.9% APR on purchases and cash advances.

First Trust's Options Visa/MasterCard charges annual interest rates of 12.9% to 18.9% APR on purchases, and 14.63% to 20.71% APR on cash withdrawals.

Northern Bank's MasterCard charges an annual interest rate of 17.9% APR and offers 0% on purchases and balance transfers for five months.

Ulster Bank's Visa and MasterCard charge standard annual interest rates of 19.9% APR.

The Fool says: Again, these cards are ridiculously expensive when compared to theBest Buy credit cards, so find your perfect plastic and cut up your Northern Irish cards!

Personal Loans
(for an unsecured personal of £5,000 over three years, without rip-off payment protection insurance)

Bank of Ireland (NI) charges a total amount repayable of £5,710.16 (9.3% APR), including an arrangement fee of £65.

First Trust charges £5,789.92 (10.3% APR), including an arrangement fee of £40.

Northern Bank's £5,500.63 (6.5% typical APR) is the only reasonable financial deal in the whole of Northern Ireland and the same rate is offered to all those who are approved for credit.

Ulster Bank charges £5,922.72 (12.2% APR), including an arrangement fee of £90 -- what a joke!

The Fool says: Don't pay over the odds when you borrow: give these four lenders the boot and check out theseBest Buysfor your perfect personal loan!

Savings
(based on a balance of £1,000)

Bank of Ireland (NI)'s Classic Saver account pays a feeble 0.90% AER before tax.

First Trust's Select Savings account also pays 0.90% AER before tax.

Northern Bank's Summit account pays 1.35% AER before tax although higher rates are available if you also have a current account with the company.

Ulster Bank's Easy Access account pays 0.90% AER before tax.

The Fool says: These substandard savings accounts are cheating you. Why earn less than 1% a year before tax when you can earn five times as much interest with aBest Buy savings account?

Finally, the easiest way to get around the "Northern Irish rip-off" problem is to shop around online for better products, because the Internet doesn't recognise geographical boundaries! Granted, not all UK-based banks offer a full range of banking services to Northern Irish residents. However, it won't be hard to beat the awful deals listed above, trust me on that!

More: Use the Fool to compare bank accounts, compare credit cards, compare personal loans and compare savings accounts.