28 January 2008
Banks are not making changes to their terms and conditions sufficiently clear to their customers, a top consultant has said.
Some customers, when informed by banks that their terms are changing, struggle to read the long documents provided - and are often not informed where exactly the changes have been made within them.
In turn, this could lead to people signing up to a contract that they might not be happy with in future - a concern that is particularly relevant considering the ongoing High Court case regarding bank charges.
Mike Young, who is involved in the drafting of the new Banking Code, admitted to the BBC that the wording on the current guidelines regarding changes to terms and conditions was ambiguous and should be changed.
Currently, the Code does not specify that banks need to send customers a summary of any changes made.
Mr Young said: "If I had known at the time [of the drafting] there was that uncertainty, I would have made a recommendation to say that it would make sense for everyone to be given a summary of the changes, rather than just the whole lot."
Eight UK financial institutions are currently defending their penalty charges system in court.
Consumer groups and the Office of Fair Trading allege that the levies are unfairly high - but the banks say that the penalty system is detailed in the initial contracts that customers sign when taking out an account.
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