Building Societies Association
Media Centre
Press release
New Banking Code will ensure fair deal for customers
Contact: Rachel Le Brocq
Date: 22 Nov 2007 		Print page  |   Email 

Bank and building society customers will benefit from changes to be introduced following a wide ranging independent review of the Banking and Business Banking Codes. 

The sponsors of the Banking Codes (the British Bankers’ Association, the Building Societies Association and APACS - the UK payments association) have today announced the changes that will be made to the personal and business Banking Codes from March 2008 following a public consultation and review by independent reviewer Mike Young.

A large majority of the recommendations that have been made by the reviewer after considering the 50 consultation responses are accepted and will be included in the new codes. Among the new measures being adopted are:

  • More help for customers who may be heading towards financial difficulties
  • Greater clarity of information on products, including pre-sale summary boxes for unsecured loans and savings accounts
  • Prohibition of account closure solely because a customer has made a valid complaint
  • Strengthened credit assessment practices to enhance responsible lending
  • Information on the forthcoming unclaimed assets (dormant accounts) schemes
  • Greater certainty in cheque clearance
  • Greater transparency of information for credit cards and credit card cheques.
     

Mike Young said: “I am very grateful to everyone who sent in submissions and to those who answered my subsequent requests for information.  The review involved comprehensive consultation with key stakeholders and I am pleased that most of my recommendations have been accepted, in one form or another.”

Angela Knight, Chief Executive of the British Bankers’ Association, said: "The Banking Code is the charter that sets out how customers are treated by their banks and building societies. It is there to ensure that everyone - both customers and financial providers - know what they have to do and where their responsibilities lie. These revisions to the Code reflect the need to keep up with a changing world. It will continue to underpin the treatment and protection customers value and have every right to expect.”

Adrian Coles, Director General of the Building Societies Association said: "In its 15-year existence, the Banking Code has been updated to reflect changes in consumers' needs and in retail banking practice.  The beauty of a voluntary Code, and the independent review that we have recently undertaken, is its flexibility - it can be updated to ensure consumers are protected quickly and effectively.  The Code continues to set out what consumers can expect from their bank or building society and how they will be treated - it remains both valuable and timely."

Paul Smee, Chief Executive of APACS said: “"This new Code will deliver greater certainty and transparency for anyone accepting cheques. Changes to cheque clearing mean increased transparency and that for the first time customers can be sure that six days after paying in a cheque the money is definitely theirs. This is great news for all customers but particularly for small businesses and those who have basic bank accounts."

~Ends~


Independent Reviewer's Recommendations

Banking Code Review - Sponsors's response

Contact:

British Bankers’ Association
Lesley McLeod:     020 7216 8989   lesley.mcleod@bba.org.uk

APACS
Rosalind Sellers:  020 7711 6280   rosalind.sellers@apacs.org.uk
Sandra Quinn:       020 7711 6234   sandra.quinn@apacs.org.uk

Building Societies Association
Rachel Le Brocq:  020 7440 2205   rachel.lebrocq@bsa.org.uk
Neil Johnson:        020 7440 2260   neil.johnson@bsa.org.uk 

Notes
  1. Copies of both the review and the industry's response are will be published on each of the sponsors’ websites on Thursday 22nd November (www.bba.org.uk; www.apacs.org.uk; www.bsa.org.uk ).
  2. The British Bankers' Association (BBA), the Building Societies Association (BSA) and APACS (the UK payments association) are the three industry sponsors of the Banking Code.

  3. The Banking Code is a voluntary code which sets the standards of good banking practice for banks and building societies to follow when they are dealing with personal customers in the United Kingdom.  As a voluntary code, it allows competition and market forces to work to encourage higher standards for the benefit of customers. The first Banking Code  was introduced in December 1991 and took effect from 16 March 1992

    Both codes are monitored independently by the Banking Code Standards Board.

    The Banking Code and Business Banking Code are scheduled for review in three years' time.

  4. The Independent Reviewer of the Banking Codes, Mike Young, is an independent consultant following his retirement as head of the small firms team at the Bank of England, a position he had held since 2001.  He was director of consumer and retail at the British Bankers’ Association between 1995 and 2001 and prior to this had held senior management positions at the Bank of England since 1973.  Mr Young is a member of the Government’s Small Business Investment Taskforce and chair of its business angels group.  He also manages research contracts for the DTI Small Business Service.  Other roles include being a trustee of the Debt Advice Gateway Trust and work for Young Enterprise, a charity providing business education in schools.