Banking Code Review does not go far enough says Consumer Panel

22 November

In response to today's publication of the latest changes to the Banking Code, John Howard, Chairman of the Financial Services Consumer Panel said:

"We welcome the commitment to consider incorporating an overarching principle of fairness in the Banking Code. It is extraordinary that banks are not required to operate like this now, and we look forward to swift progress in this area. We also welcome the commitment to lend responsibly, and the more detailed explanation of how subscribers to the Code will treat customers in financial hardship over bank charges. However, there are still many areas where the Code could go further – we note the independent reviewer has said his reforms have been accepted 'in one form or another', but we believe that some of those 'forms' are not sufficient.

"This again leads us to conclude that the FSA is standing too far back and that it should apply conduct of business regulation to retail banking . This is too crucial an area for consumers to rely on a voluntary Banking Code. The Consumer Panel believes, for instance, that if the FSA had already applied the principle of Treating Customers Fairly, the issue of unauthorised overdraft bank charges could well have been dealt with much earlier. "

Notes to editors

1. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.

2. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. More information about the Panel's work is available on this website.

3. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.

4. There are currently twelve members of the Panel as listed below (for further information on individual members, see the Panel's website – www.fs-cp.org.uk)

John Howard (Chairman)
Adam Phillips (Vice Chairman)
Kay Blair
Michael Chapman
Stephen Crampton
Caroline Gardner

Jenny Hamilton
Tony Hetherington
Nick Lord
David Metz
Lindsey Rogerson
Carol Stewart