Bank obligation to inform customers on fall in interest rates

Our Ref: PC82740.ISS01233881

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Dear Mr Rogers

Thank you for your email dated 9 April 2010.

I understand from your email that you are querying the provisions of the Banking: Conduct of Business Sourcebook (BCOBS) and, historically, the Banking Code. You would like the Financial Services Authority (FSA) to comment as to whether there is a requirement for firms to inform customers of changes to their interest rates.

Firstly, I would like to thank you for taking the time to prepare and send us your enquiry. I will endeavour to provide some useful information in respect of these issues.

I can confirm that BCOBS Chapter 4.1 contains guidance on action that firms should take when a 'material change' to any interest rate is made. I have included below a link to BCOBS for your convenience; please refer specifically to 4.1.2G (3) onwards:

http://fsahandbook.info/FSA/html/handboo...

BCOBS 4.1 also states that a firm must provide, or make available to a banking customer, appropriate information about a retail banking service and any deposit made in relation to that retail banking service in good time.

The Banking Code states that a firm 'will keep you informed about changes to the interest rates on your accounts'. However, it is important to note that the Banking Code was voluntary, and was replaced by BCOBS from 1 November 2009. Please also note that BCOBS is not voluntary for firms.

If a customer believes that a firm has not complied with our rules, then they should inform the FSA so that the relevant department may be made aware. If the customer is otherwise dissatisfied with the service they have received, they are entitled to complain to the firm.

All firms that are authorised and regulated by the FSA must have complaints-handling procedures in place. Our complaints-handling rules require the firms we regulate to:

send you a prompt written acknowledgement, saying it has received your complaint and is dealing with it; and
ensure you are kept informed of the progress of your complaint.

If the firm cannot provide a final response within eight weeks, then they must inform the customer that they can ask the Ombudsman to consider their case.

If you have any future questions on financial services and products, you may find it easier to call our Consumer Helpline on 0845 606 1234 (call rates may vary). You can also access relevant information online at:

http://www.fsa.gov.uk/pages/consumerinfo...

And via the Consumer Financial Education Body's website:

http://www.moneymadeclear.org.uk/

I trust this is of assistance.

Yours sincerely

Joseph Tatnell (Mr)
Customer Contact Centre
Financial Services Authority
Consumer Helpline: 0845 606 1234 (call rates may vary)
http://www.fsa.gov.uk/pages/consumerinfo...

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