New rules for banks to improve customer service

29/10/2009

A new regulatory regime is to take effect on November 1st, with the Financial Services Authority (FSA) to have responsibility for banks' day-to-day interactions with customers.

In a statement yesterday (October 28th), the regulator said that consumers would feel "wide-ranging benefits" as a result of the new code of conduct.

Measures contained in the code include an obligation for banks and building societies to warn customers of cuts in savings account rates in advance.

Unexpected debits from plastic cards must also be refunded to customers, unless the bank can give a good reason for taking the money in the first place.

The FSA will also require the firms to provide more information about products and services, so that customers can make more "informed" choices about how they bank.

Dan Waters, director of conduct risk at the regulator, commented: "There will be specific standards covering many aspects of everyday banking transactions that have been major concerns for customers."

Kevin Still, EuroDebt director, said: "Better clarification of what 'treating customers fairly' really means is at the heart of what customers want to see in terms of improvement in service. The enormous volume of complaints about banks over-charging in the second half of 2008 is demonstration of this. We have all seen evidence of banks passing on bad news quickly, but hedging their bets when it comes to matters that should benefit the client.

He added: "Bank customers should also help themselves by being prepared to switch, especially where loyalty does not seem to be rewarded any longer. Customer choice is key, especially is you are recovering from financial difficulties through the recession. EuroDebt is offering prepaid current accounts to all UK residents whether they are on a Debt Management Plan, an IVA or even bankrupt."

The Turner Review, conducted by the head of the FSA and released earlier this year, recommended increased regulation for the UK financial system, in order to prevent future crises similar to the credit crunch.

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

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