Banks and building societies have pledged to give more help to customers who are facing financial difficulties.
They will also introduce better credit assessments to boost responsible lending and improve the transparency of information on credit cards and credit card cheques.
Providers will also no longer be able to close a current account solely because the holder has made a valid complaint, as some institutions threatened to do when people tried to get refunds for unauthorised overdraft charges.
The changes will all be introduced to the Banking Code following an independent review carried out by Mike Young, formerly head of the small firms team at the Bank of England.
Other changes will see consumers being given better information on financial products before they buy them, such as pre-sale summary boxes for unsecured loans and savings accounts.
There will also be greater certainty in cheque clearance, meaning people can be sure that money will be available in their accounts six days after paying in a cheque.
The revised code will also include details on the new unclaimed assets schemes, which aim to reunite people with forgotten money left in dormant bank accounts.
The Banking Code of Standards Board will remain the main arbitrator of how the code is implemented, but other regulators will retain the right to step in if they feel it is necessary.
Angela Knight, Chief Executive of the British Bankers’ Association, said: ‘These revisions to the code reflect the need to keep up with a changing world. It will continue to underpin the treatment and protection customers value and have every right to expect.’
Which? personal finance campaigner Doug Taylor said: ‘It is encouraging that subscribers to the Banking Code have agreed certain measures that will help to protect consumers.
‘By including summary boxes on loan and credit card statements consumers will better understand the real cost of their borrowing. And after many customers’ current accounts were closed or threatened with closure when they complained about their bank charges, we are happy that banks will no longer be allowed to get away with this outrageous practice.
‘We are concerned, however, that the review’s proposals for changing the regulatory structure in the banking sector should not result in any reduction in future consumer protection.
‘Consumers should be able to rely on competent regulation and monitoring to sort out problems with the banking industry. At a time when the industry is still suffering from a crisis of customer confidence, there needs to be more effective regulation and monitoring, not less.’
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