Consumer Confusion - Why 'Small Print' Rules Need Updating

Rules on the ‘small print’ in bank policies should be changed to make them more clear and accessible to customers, according to an independent review.

Mike Young is the Independent Consultant in charge of reforming banking guidelines. He has said that banks should send out the alterations to their policies summarised, as opposed to mailing out a full set of terms and conditions.

This issue has been part of a long standing campaign for the consumer group Which? who state banks should clearly highlight their changes rather than send out the full version of terms and conditions. However, the Banking Code Standards Board say that the banks are fulfilling their obligations to inform their customers of changes.

Ambiguity over this issue lies in the wording of the Code’s guidelines. They say banks must give ‘detailed wording’ of any changes made but does not specify whether sending out the full version of new policies without a summary of the differences satisfies this requirement.

Mike Young initially did not see any need for changes to the code. However, once informed of a Natwest online customer bombarded with a 24 page document containing his account’s new terms and conditions, Young felt reform was needed, "If I had known at the time there was that uncertainty, I would have made a recommendation to say that it would make sense for everyone to be given a summary of the changes, rather than just the whole lot."

Natwest defend their policy, stating their new version of terms and conditions is 40% shorter than old ones and are easily understood by readers.

However, the length of these documents deters most people from reading them thoroughly as Martin Hocking, the editor of Which? Money Magazine, points out, "It is no good sending somebody 24 pages of copy and hoping they will guess where the changes are …They are not going to be read."