Banks are not doing enough!

Tuesday 1st April, 2008 

The recent launch of the new improved Banking Code has done little to reassure those who are in debt or Debtwatchdog.

The new voluntary code compels banks to contact their customers when they believe that they may have debt problems. Prior to this new code, it was up us to contact them.

The new Banking Code also compels banks to take a more responsible approach to lending. Now, banks must evaluate their customer's ability to repay the loan. To achieve this, banks must look a customer's credit ratings, their income and any other financial commitments.

In addition the Banking Code commits banks to

• That customers are provided with information, about a loan or savings product, in a summary box prior to completion of the agreement.
• Provide help to customers who wish to transfer their current account to another bank.
• Provide clear information regarding the time it takes to clear a cheque
• Provide their customers with the latest information on how to avoid fraud transactions being made on their accounts
• Provide customers, who are unable to use chip and pin cards with information about alternatives.

Debtwatchdog believes that the code does not go far enough and that more could be asked of the banks. While on one hand the code encourages responsible lending, it still permits the practice of sending out unsolicited credit card cheques and glossy leaflets encouraging more borrowing on the other hand.

The code also says nothing about increasing minimum monthly repayments on credit cards. This would encourage the repayment of the debt more quickly, which would be good news for the debtors but bad news for the creditor as they see their profits taking a dip.

Debtwatchdog covers a range of debt solutions including, debt consolidation, debt management, IVA's and the Scottish equivalents. Act now and start dealing with your debt if you need any help then visit our debt forum.