Borrowers can expect to be treated in a fairer and clearer manner by their providers from today, after the Financial Services Authority (FSA) took over the regulation of how banks treat their customers.
The changes have been enforced as the body feels too many complaints have been generated by poor customer service, and that the old system, whereby banking institutions use a system of self regulation, was not working.
Under the new regulations, banks will be expected to provide more comprehensive information to their customers, such as advance notice of changes to terms and conditions. Those which do not do so run the risk of fines if they do not comply.
Amongst other changes aree rules that will ensure customers are briefed fully on services and polices before they sign up for them, while money lost through unauthorised transactions must be refunded unless there is a clear case for investigation.
Banks must also credit current and instant access accounts as soon as funds are received, a move which has been refereed to as 'adding value.' This change will be extended to all accounts from 1 February next year.
"The Lending Code sets out what it means to be a responsible lender covering both credit assessment and the support that will be available if things go wrong," said Robert Skinner, chief executive of the Lending Standards Board.
"It will be followed by all significant providers of credit products that currently subscribe to the Banking Codes."
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