MP calls for more honest statements

An MP is calling for banks in the UK to use customers' statements in order to provide more honest and easily accessible information with regards to charges and profits.

MP, Andrew Tyrie, is calling for banks to use what he described as an 'honesty box', which would be clearly visible on consumers' statements and would contain information relating to how much the banks charge in fees and penalties, and even how much profit the banks make from investing the cash of their customers.

Often, information regarding to fees and charges applied by banks is hidden in the small print, and this means that many consumers continue to run their current account without even knowing how much they would be charged if they exceed their overdraft limit or cannot cover a direct debit or cheque. According to Mr Tyrie as a result of this information consumers would quickly see that there is no such thing as 'free' banking in the UK.

Banks have been threatening to end free banking in the UK as a result of the scandal and financial losses that they face due to consumers reclaiming their bank charges. However, Mr Tyrie believes that this will not really have much affect, as there is no such thing as free banking – and many consumers have responded to surveys claiming that they would prefer paying a monthly fee for their banking rather than keep being charged extortionate penalty fees. Many consumers have been reclaiming hundreds and even thousands in bank charges going back up to six years after the charges were found to be unfair and unlawful by UK financial regulators.

Mr Tyrie stated: 'My proposals may appear radical but it would help restore public confidence. The current confusion in retail banking is only a little short of scandalous. Action is long overdue.'

Tom Smith
14.05.07