In November 2007, the sponsors of the Banking Code (the British Bankers’ Association, the Building Societies Association and APACS – the UK payments association) announced that both the personal and business Banking Codes would see some changes from 31st March 2008 following a public consultation and an independent review.
The Banking Code is a voluntary code which was first introduced in December 1991. It sets the standards of good banking practice for banks and building societies to follow when dealing with customers in Britain and is monitored by the Banking Code Standards Board.
The independent reviewer, Mike Young, recommended a number of new measures, based on public submissions, which will be included in the new codes from 1 March. Below are some of the new measures which will be introduced into the 2008 Banking Code:
• More help for those customers who may be on the way to experiencing financial difficulties
• Pre-sale summary boxes for unsecured loans and savings accounts to increase clarity of product information
• Followers of the Code will be prohibited from closing accounts just because the customer has made a valid complaint
• “Strengthened credit assessment practices” to increase and develop more responsible lending
• More information on the imminent unclaimed assets (dormant accounts) schemes
• Increased certainty in the clearance of cheques
• Increased transparency of information about credit cards and credit card cheques
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 is its flexibility – it can be updates 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 customer 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.”
Related articles: ‘Banking Code will change in March’
