Banking code launched
The new banking and business banking code contains an enhanced promise by banks and building societies to treat customers fairly and reasonably.
That promise is supported by eight key commitments and the standards of the revised code. The new codes take effect on 31 March following an independent review. Changes to the codes were made after consultation with consumer groups, HM Treasury, the Financial Services Authority, the Office of Fair Trading and other interested parties.
As well as the enhanced promise of fairness, further key improvements to the banking code include a new commitment on responsible lending, more help for customers who may be heading towards financial difficulties and strengthened credit assessment practices to enhance responsible lending.
It will also ensure clearer information about products, including pre-sale summary boxes for unsecured loans and savings accounts and information on how to find any lost accounts.
Angela Knight, chief executive of the British Bankers’ Association, said: “This new Banking Code gives strong commitments that banks will lend responsibly and will help customers who may be heading towards financial difficulties. The long consultation process, now complete, has shown clearly what customers want and expect from their banks. That has been the driver for these changes.”
Kevin Mountford, head of savings at price comparison site moneysupermarket.com, said: “Broadly speaking people will see the benefits of these changes, but they simply don’t go far enough.
“At last, banks will finally have to help their customers switch current accounts. And strengthening the credit assessment process so providers only lend to people who can afford the debt, as well as introducing measures to identify and help customers who may be heading towards financial difficulty, are to be applauded.
“However, despite trumpeting the need for greater transparency and product information savers are being failed. Providers will still not immediately informing customers when they introduce new savings products the same as those currently held by their customers, but with higher rates. Unfortunately, until providers agree to self regulation in this area they will continue to pay lip service to treating customers fairly and leave their savers languishing in poorly paying accounts.”