They immediately attracted fiery criticism from the Consumers' Association, the Data Protection Registrar and Sir Bryan Carsberg, the tenacious Director-General of Fair Trading.
That the banks and building societies were forced on to the back foot was a swift reversal in fortunes. Earlier, members of their joint working party - led by Chris Lendrum of Barclays and including Sir Nicholas Goodison, chairman of TSB Group and president of the 300-strong British Bankers' Association - had posed proudly for photographs as they launched the updated Code. Among other things, it promises to:
deal with complaints fairly and expeditiously;
give customers notice before charges are taken off their accounts (by 1997);
tell savers how much interest they will receive;
ask for express permission before passing on confidential information;
give 28 days' notice of any intent to tell credit reference agencies about 'undisputed personal debts which are in default and where no satisfactory proposals for repayment have been received following formal demand'.
However, instead of focusing on the code's virtues, the following day's headlines gave prominence to the critics' view that it was a flimsy document that failed to address the real issues.
'I am disappointed that the code fails to take account of the banks' and building societies' increasing emphasis on the sale of financial services,' said Sir Bryan.
'They have wasted an opportunity to make a step increase in consumer protection.' Jean Eaglesham, head of the Consumers' Association's money unit, added that lenders were dragging their feet over signalling charges, as the measure is not due to become mandatory until 1997.
But the lenders' misery did not end there; the critics have not settled for a short, sharp verbal caning. Sir Bryan led the second-wave assault, ordering his executives to ask banks and building societies what else they were planning to do for the customer.
'We don't intend to let the matter lie,' he explained. 'The banks are quite well aware that I am interested now. I think what I will do is work with the banks and see how things go.'
But Ms Eaglesham was heading straight off down Whitehall to seek government support for a crackdown on the banks and building societies. 'Some see customers pretty much as cannon fodder,' she said. 'We think they are storing up trouble for the future; they see the code principally as a public relations exercise, and they are not doing themselves any favours. We will ask the Government for a statutory code, or a review body that has a lot more power to make banks take the code a lot more seriously.'
The Data Protection Registry was no less severe. John Lamidey, the assistant registrar responsible for the financial sector, pointed out that the code still left the banks in possible breach of the Data Protection Act.
People applying for financial services are often told that confidential information about them will be passed on to credit reference agencies and other bodies unless they tick a box. 'It is impossible to infer assent from silence alone,' Mr Lamidey insisted.
'In a sense', admitted a beleaguered Chris Lendrum, chairman of the working party, 'it wouldn't have mattered what improvements we came up with - Carsberg and the others would still have asked for more. It's what they're paid for, after all.'
Mr Lendrum's biggest headache was rounding up the 300 members of the British Bankers' Association, which covers the spectrum from big high-street names such as Marks and Spencer to obscure UK offshoots of foreign banks. His working party also embraced the Association for Payment Clearing Services and the Building Societies' Association.
In the end M&S and some foreign banks ducked out of the code. By implication, if the working party had tried to take a tougher line, more would have dropped out. That would have damaged the code's credibility.
Mr Lendrum added: 'I can assure you that, far from being complacent, the banks have moved a considerable distance in very important respects, particularly pre-notification and express consent. Over the next three years, we will see the banks continuing the process in which their attitudes are changing rapidly.'
His main disagreement with Sir Bryan concerns the OFT chief's argument that banks and building societies should give what the Financial Services Act calls 'best advice' to customers.
Mr Lendrum contends that this process, often involving lengthy interviews to discover customers' financial details, is disproportionate when all someone wants is to borrow a few thousand pounds.
Sir Bryan replied: 'I could accept that there should be a de minimus position on best advice. I am more concerned with applications for mortgages, investments and pensions.'
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