Memorandum submitted by Mr Alan Debenham
I seek to put forward my views to the Treasury
Committee for the inquiry into services provided by banks and
building societies and I should be pleased, therefore, if you
would submit this letter to the committee.
My concerns are with the Banking Code and the
I understand that monitoring performed by the
Banking Code Standards Board has revealed that many banks and
building societies are not adhering to the Code and my fear is
that it is being used to present an appearance of respectability
by some organisations, which is undeserved. I also believe that
there is considerable scope for improvement in the monitoring
and compliance process.
I am aware that the Banking Code is currently
under review and that this time the process begins with an independent
reviewer appointed by the British Banker's Association before
the BBA finalises the document.
This appears to present an improvement over
previous practice. However, I am concerned about publicity for
the review process. I understand that the DeAnne Julius Review
Group intended that the review should received sufficient publicity
to allow members of the public to be given the opportunity to
respond but publicity has been clearly lacking.
I am concerned that the powers of the reviewer
have been severely limited and are confined to a review of the
Code alone. It appears that the reviewer's remit does not cover
the Code Guidance, which represents the smallprint for the Code,
and that remains firmly in the hands of the industry. This means,
for instance, that the extent of publicity for the Code will depend
upon how much the industry wishes it to receive and if that given
to the review process is a guide then it will again be very limited.
I am also given to understand that the remit
of the reviewer does not extend to matters such as the inclusion
of a clause to deal with cases where the Ombudsman finds against
a bank or building society on one customer's account that affects
many other customers such the rulings on TESSA and ISA accounts.
I do not believe that the DeAnne Julius Group
intended that these restrictions should be placed upon the reviewer
or that the whole process for both Code and Guidance should no
be open and transparent.
In my opinion, the new review procedure is still
very unsatisfactory and leaves much to be desired.
2 May 2002