Money News
The OFT has submitted a range of recommendations to raise standards of fairness in the way British banks treat their personal and business customers.
In its response to the Banking Codes Review - an ongoing review into the self-regulatory codes of practice governing British banking - the watchdog has called for a range of measures. These include incorporating greater pricing transparency into the code for customers, in particular ending reliance on hidden charges as well as improving the quality of information to ensure easy comparisons across different products.
It is also calling for pre-notification of charges so that at least 14 days notification is given before all charges and interest are taken from customers' accounts
The code should also take account of forthcoming changes to consumer protection legislation. The Unfair Commercial Practices Directive, for example, contains a duty not to trade unfairly and prevents 'misleading omissions', particularly a failure to provide sufficient pre-contractual information for bank customers. The Consumer Credit Act 2006 also explicitly includes 'irresponsible lending' as an unfair practice relevant to the OFT when considering a licensee's fitness to hold a consumer credit licence.
The OFT is also calling for the implementation of recommendations of the Payments Systems Task Force, which agreed a number of key improvements to cheque clearing times. And OFT recommendations regarding small and medium size enterprises (SME) banking, in particular, a commitment to give SMEs information displaying transaction volumes on monthly statements, which is essential for customers to assess the benefits of switching, should also be implemented.
John Fingleton, OFT Chief Executive, said: "Significant change is needed to the banking codes of practice, particularly to address the lack of transparency that pervades the retail banking sector.
"We aspire to a self-regulatory framework in UK retail banking that achieves sufficiently high levels of fair treatment of customers that little or no external regulatory intervention is called for."
19 February 2007 © Moneyextra.com
Moneyextra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.