Mike O'Connor, of watchdog Consumer Focus, said that the current perception of free banking was not good for competition, or for customers.

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"Individuals buy holiday money infrequently and so may not shop around much or may just stick with the same supplier, " said Mike O'Connor, chief executive of Consumer Focus.

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"There would be real value in establishing a more open and honest relationship between banks and their customers on what they get, how much it costs and whether others are offering better value for money, " said Mike O'Connor, chief executive of watchdog Consumer Focus.

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