Banking Code of Conduct

KaarloTuomi

I have been trying to determine what it says in the Banking Code of Conduct. in other words, I want to know what exactly banks are supposed to think is professional and ethical behaviour. in particular in relation to charging for additional products and services.

my attempts to find this code online have come to nothing. I found the Australian code, the South African Code, and the Canadian code, but I can't find the code for a bank in the UK.

I found the website for the folk who I thought wrote the code, the Banking Code Standards Board (which I can't link to because, forum rules) but they don't have the actual code on their website. they have a link to Banking Codes, which leads to a Wikipedia page for banking sort codes, which doesn't seem particularly relevant, and doesn't make it seem as though they have their eye on the ball.

so I emailed them, and my email was returned saying that it was permanently undeliverable.

searching through this forum I came across a post that seemed to suggest that the code now has a new name. it is apparently now called the Banking: Conduct of Business sourcebook, and is maintained by the Financial Conduct Authority. I found a copy of that online (which I can't link to), but I'm having trouble finding reliable information as to whether either of these codes are authoritative, or relevant, or even current.

so, my question is: does anyone have a reliable source for the current code that UK banks are supposed to be voluntarily adhering to.


thank you.

Kaarlo Tuomi

diystarter7

Which bank?

Sandtree

The FCA maintain the handbook which includes codes of business both generally for financial services companies and ones for specific industries like the BCOBs for banking. 

https://www.handbook.fca.org.uk/handbook 

The handbook online is current and each item is marked with an R for a regulatory requirement or G for something that is strong guidance but not a regulatory requirement. You can if you want toggle it so that former/now deleted rules are also shown. 

In addition to the formal requirements of the FCA there are voluntary organisations banks can join that have their own code of conduct that they require members to follow. For example there is the Chartered Banker Institute however they are focused on individuals rather than corporate members

KaarloTuomi

thank you.

what it said is:

(1) A firm must not enter into an agreement with a banking customer under which a charge is, or may become, payable for an optional additional product unless the banking customer has actively elected to obtain that specific product.

(2) A firm must not impose a charge on a banking customer for an optional additional product under an agreement entered into on or after 1 April 2016 unless the banking customer actively elected to obtain that specific product before becoming bound to pay the charge.

which is exactly relevant to my situation.

thank you.

Kaarlo Tuomi

Sandtree

Obviously you haven't commented on your situation/issue for anyone else to pass comment on but make sure you read all of BCOB 2A1.1 as there are several elements later talking about things that aren't "optional additional products" and therefore aren't captured by 1 and 2 you quoted above... eg unauthorised overdraft fees.

KaarloTuomi

I am being deliberately coy about this because this is the subject of an ongoing legal case, but...

1. thank you for mentioning those exceptions. they don't apply in this case and I didn't think they would, but that you mentioned  it speaks well of you. thank you.

2. paragraph 8 (a) is relevant:

Where a banking customer is required to obtain a specific additional product in order to receive the retail banking service, the product is not an optional additional product.

which would, on the face of it, mean that a product supplied as part of, say, a packaged bank account, would not be an optional additional product. if an Xtra account has travel insurance, you can't have an Xtra account and opt not to have the travel insurance. it is a part of the account. which seems fair.

what happened in my case was the bank changed my account to an Xtra account of their own accord. when I wrote and asked them to change it back, they refused. when I said I don't want the holiday insurance, they said, "ah, you have to pay for it anyway." (I paraphrase for clarity).

from my perspective, that's just fraud. and that's illegal. and we are going to court. my purpose in coming here was to determine what the bank are supposed to consider is the right way to treat their customers. these regulations suggest that the bank clearly did not abide by their own professional standards.

thank you.


Kaarlo Tuomi

Sandtree

KaarloTuomi said:

from my perspective, that's just fraud. and that's illegal. and we are going to court.

Why would you go to court rather than to the Financial Ombudsman? Court incurs costs which may or may not be recoverable whereas the ombudsman is free for you. The ombudsman is arguably slightly more customer leaning, there are a fair number of cases available online where the FOS says they have ruled in favour of the customer but acknowledge that a court wouldn't have done. The FOS consider things like the FCA's "treating customer fairly" principles whereas the court judges things only to the letter of the law. 

Ultimately your choice but most would exhaust the Ombudsman process first as you can always go to court afterwards if you dont accept the Ombudsman's decision... that said, I am yet to hear of a case where the ombudsman said no but the court subsequently said yes.