Government 'must make banks fairer'

22/10/2008

The government's plan to buy up shares in banks should lead to fairer treatment of customers, Which? said today.

According to the consumer group, ministers should use the £37 billion bail-out to enforce the change.

Recently, authorities have made attempts to boost consumers' experiences of the financial services sector - with schemes such as the Financial Services Authority's Treating Customers Fairly being launched.

However, a poll from Which? shows that four in five people support a "major overhaul" of the banking system, in order to make future credit crunches less likely.

Which? chief executive, Peter Vicary-Smith, said: "The banks have had their bail-out - now it's time for them to deal sympathetically and fairly with the plight of ordinary consumers, many of whom are anxious about their savings or struggling with their mortgage."

EuroDebt director, Kevin Still, added: "Whilst banks aren’t lending and have increased the decline rate for applicants applying for new credit, they are also increasing interest rates on existing credit card balances, ruthlessly applying default fees where credit limits have been exceeded and toughening their debt recovery tactics.

"None of this sits well with Treating Customer Fairly, when these very same clients were the ones that they took on to meet aggressive lending targets in 2006 and 2007."

Tags; Debt Management and Banking, Recent Graduate Debt, Credit Card Lifestyle,

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