Banks Need to Use Clear and Simple Language
One of Britain's top financiers warned yesterday that banks were confusing customers with their products and needed to work on their image.
The sensitivity follows attacks from the Government at the banks' allegedly making excess profits.
'A large number of people who have a bank account do not fully understand the intricacies of their relationship with the bank,' said Ian Mullen, chief executive of the British Bankers' Association. He said that while banks were making great steps in trying to improve the information customers received, many were still left bamboozled by terms like 'stepped bond' and 'equivalent annual rate'. 'The big issue for us is to educate and communicate with customers. Banks have got to use clear and simple language,' said Mr Mullen.
His comments come as the Big Four banks - HSBC, Barclays, Royal Bank of Scotland and Lloyds TSB - battle with the Government over its steps to curb the profits they make from small business customers.
The Government earlier this year accepted a Competition Commission verdict that the banks were overcharging small business customers and had made pounds 725 million of excess profits in each of the last three years - claims the banks deny. Politicians also accused executives from the Big Four last month of often failing to provide customers with clear information on details like interest rates on credit cards. The same notion of customer confusion occurred again this week, when the Treasury Select Committee met top executives from second-tier banks, Abbey National, HBOS and National Australia Bank, which owns Yorkshire and Clydesdale banks. …