A new banking code should stipulate that consumers are notified two weeks in advance before any charges are taken from an account and banking groups should end their “reliance” on so-called hidden charges, the independent organisation makes clear.
The calls from the OFT have been submitted to the British Banking Association as part of its recently completed Banking Codes Review consultation process, which investigates the relevant codes of practice affecting the UK’s banking sector.
Chief executive of the OFT John Fingleton said: “Significant change is needed to the banking codes of practice, particularly to address the lack of transparency that pervades the retail banking sector.”
“We aspire to a self-regulatory framework in UK retail banking that achieves sufficiently high levels of fair treatment of customers,” he added.
Unfair banking has been cited by a number of economic observers in recent days as a contributory factor behind Britain’s growing demand for Individual Voluntary Arrangements (IVAs).