HISTORIC PRESS RELEASE : Good News for Savers – Patricia Hewitt Welcomes Changes to the Banking Code [September 1998]

The press release issued by HM Treasury on 14 September 1998.

Patricia Hewitt Welcomes Changes to the Banking Code Better information for savers about changes to savings accounts has been welcomed by the Economic Secretary Patricia Hewitt.

The welcome follows an announcement by the British Bankers’Association (BBA) and the Building Societies Association (BSA)that there will be changes to the Banking Code which will ensure customers get proper information on changes affecting savings accounts.

The main changes include:

• a guarantee of 30 days notice of changes in terms  and  conditions and a 60 day waiver of notice for customers  who do not like the changes;
• a 14 day cooling off period when customers open new  savings accounts;
• better written information for people with postal or
  telephone based accounts;
• an annual written summary of all available accounts, for  all customers; and
• an end to obsolete and superseded accounts.

Welcoming the changes, Ms Hewitt said:

“This is really good news for savers. It is only right and proper that customers have full and up to date information on the terms and conditions of their accounts.

“We want to ensure that customers are provided with clear and accurate information so they have confidence in the decisions they take when dealing with their bank or building society.

“I welcome in particular the new rules on periods of notice,
the introduction of cooling-off periods, and the abolition of
obsolete and superseded accounts.”

NOTES TO EDITORS

1. On 7 May 1998, following a meeting with David Davis MP, the former Economic Secretary Helen Liddell asked Treasury officials to investigate press reports that banks were not dealing fairly with customers over changes to interest-bearing accounts.

Subsequently, Mrs Liddell asked the industry to tighten up the Banking Code.

2.  The BBA and BSA have now agreed the following changes to the Banking Code:

• better information to customers on how they will be informed of interest changes;
• a 14 day cooling off period when customers sign up to a new account;
• a guaranteed 30 days notice for changes in account termsand conditions;
• a 60 day waiver of notice, if customers do not like the changes to their account conditions;
• clear messages on interest changes to all customers,including written notices to those with postal and telephone accounts;
• an annual summary of all accounts offered, for all customers; and
• abolition of superseded and obsolete accounts.