Bank crackdown on its way

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Indy Politics

The Government will introduce tougher new standards for credit cards and encourage more complaints against financial groups, it announced today.

The Government will introduce tougher new standards for credit cards and encourage more complaints against financial groups, it announced today.

The moves are part of its response to the Cruickshank Report into UK banking, which said banks were overcharging their customers by up to £5 billion a year. It called for an end to the near monopoly of personal and small business banking currently enjoyed by the big four banks.

The report also called for more competition all round and better provision of banking services to all personal customers - especially the three million people who did not have access to them at all.

The Government has now responded by announcing it will:

? Set out CAT standards on charges, access and terms for credit cards, together with a call for disclosure of key terms and conditions;

? Consult on extending CAT standards to other financial services products;

? Review self-regulatory systems, such as the Banking Code, to make sure they deliver benefits to consumers;

? Encourage comparative tables of banking products and complaints against financial services firms.

The Government has already referred the issue of small business banking to the Competition Commission and the major high street banks have already bowed to public pressure and agreed that from January 1 they will abolish charges for customers using their cash machines - a practice which was strongly criticised in the Cruickshank Report.

The Government said it was working on setting up a so-called "payments regulator" to open up bank networks, such as cash machine services, to additional competitors and make sure access to those networks was not too expensive.

It also wanted to ensure that consumers and financial service providers benefited from the opportunities presented by e-commerce.

In addition, it planned to review its money laundering regulations to make sure they were not excessive and did not hamper competition.

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