Consumer Council Welcomes Banking Report But Benefits Needed Now Not Later
The Consumer Council has welcomed today’s final report by the Independent Commission on Banking , which aims to make switching easier and to ensure there is greater transparency in bank charges. But, it says, Government must not wait until the end of the decade – as the report proposes – to implement the proposed reforms, but ensure they happen sooner
Antoinette McKeown, Consumer Council Chief Executive said : “Today’s report marks an important step towards a new system where banks must compete rigorously for consumers’ business, and one that will not cost taxpayers billions of pounds if things go wrong. Legislation is needed to bring about the significant changes in the market. Whilst it is important to get that right, an eight-year timeframe is too long for consumers who have already borne the brunt of banking failures to date. It is also important that consumers don’t bear the cost of these structural changes through higher fees and charges. However, we look forward to seeing the detailed action plan which the Chancellor has this afternoon committed to delivering by the end of this year.
“Today’s recommendations, once implemented, will ensure switching takes a maximum of seven working days and will give consumers confidence that their direct debits will be transferred properly. These recommendations are backed up by recent Consumer Council research which showed 72 per cent of people said that they did not switch because they had either been with their current account provider for too long or it was too much hassle.”
Today’s report also proposes additional transparency across banks’ charges and products which will help consumers make the right choices.“Given the added protection clearly needed, changes are needed sooner rather than later,” said Antoinette.
The Consumer Council continues to encourage consumers to switch banks. If anything goes wrong and you are unhappy with the switching service or other aspects of service, complain directly to your bank.If you are not satisfied with its response you can take your complaint to the Financial Ombudsman Service (FOS). The FOS helps settle individual disputes between banks and their customers and it is completely impartial and free. Call 0800 0 234 567 or go to www.financial-ombudsman.org.uk.”
For further information please contact Keelin Kelly at the Consumer Council on 028 9067 2488 or email [email protected]
The Independent Commission on Banking (the Commission) was established by the Government in June 2010 to consider structural and related non-structural reforms to the UK banking sector to promote financial stability and competition.
The commission, led by Sir John Vickers, recommends ‘vigorous competition among banks to deliver the services required by well-informed customers’.
Proposed reforms include 7-day timeframe for switching and improved process for transferring direct debits. Ring fencing (separating a bank’s investment operations from its consumer/small business operations so that if the investment operation fails, the taxpayer wouldn't have to bail out the investment bank) could take many years unless the Government takes action to implement it quickly
Satisfaction with Banks and Building Societies, Millward Brown, March 2010