The Office of Fair Trading (OFT) has announced a significant reduction in transfer times for cash individual savings accounts (ISAs) following a super complaint from Consumer Focus.

The transfer period for cash ISAs will be lowered from 23 to 15 working days from 2011, which could be enforced by the Financial Services Authority (FSA).

After a 90-day investigation, the regulator said in the future there would also be greater transparency over interest rates for cash ISAs.

Clive Maxwell, the senior director for services at the OFT, said the decision would benefit 17.5m consumers with savings of £143bn.

He said: “Our work over the past 90 days has revealed that, whilst there is often strong competition between providers in this market to win new savings, the transfer of cash ISAs is taking too long and there is not enough transparency over interest rates.

“The voluntary changes announced today will give consumers a fairer deal and drive stronger competition.”

Mike O'Connor, chief executive of consumer body Consumer Focus, said the cash ISA market was “inefficient, secretive and stops people making informed choices”.

He said: “We live in the age of keyboards, not quills. ISA transfers should take days not weeks, certainly not over a month.

“For competition to work for consumers, they need to be able to switch simply, quickly and with the right information." 

O’Connor said the 15-day transfer guideline should be “the bare minimum and not a target”.

He added: “At the moment if every saver moved onto the best deal, they would collectively gain billions. This is one industry where loyalty clearly doesn't pay." 

Under the current set-up, Consumer Focus argued, customers were attracted by good headline rates but were then not kept informed of changes and transferring was diffcult.

Consumer Focus called for banks to meet the new rate of interest even if there is delay to the transfer, and for the introduction of the May 2012 deadline for interest rate changes to be brought forward. 

The consumer group also said the best and worst banks and building societies should be identified by forcing providers to report transfer times to the FSA.

Eric Leenders, executive director for retail banking at the British Bankers’ Association, said the industry had been in agreement with the OFT’s findings.

He said: "We have already started to look at ways in which the process can be made even faster, including how supporting data can be transferred electronically."