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Banking reforms come into force

Consumers should enjoy faster money transfers and find it easier to switch accounts following wide-ranging regulatory reforms which came into force this week.

City watchdog the Financial Services Authority has taken over regulation of the way banks treat their customers, replacing the previous voluntary Banking Codes.

The new rules, which apply to all banks, building societies and credit unions, cover everything from money transfers between accounts to giving consumers more information on products before they take them out.

They will also offer consumers greater protection from fraud, as banks will have to refund any suspicious transactions on current and instant access accounts immediately, unless they can give a good reason why they need to investigate the claim.

Other measures being introduced include making it easier for people to switch accounts between different providers, with banks required to provide a “prompt and efficient” service.

Consumers will also get two months’ warning if the interest rate they receive is being cut.

Banks will also have to complete money transfers between accounts by the close of business the next day, unless otherwise agreed with the customer, while those receiving the funds will be paid interest on the money and have access to it sooner.

This was posted in Bdaily's Members' News section by Ruth Mitchell .