Banks 'support ageism'
Banks and building societies have rejected a plan to ban age discrimination when customers ask for credit, writes Paul Lewis
The proposal was made as part of an independent review of the Banking Code by banking consultant Mike Young. He was appointed by the banks and building societies to undertake the three-yearly revision of the Code.
In his report Mike Young said "there is an increasingly ageing population, often with reasonable retirement incomes, and...they should not be discriminated against simply on the grounds of their age, even though current age discrimination legislation does not currently extend to the provision of goods or services.
"The guidance should be amended to ban credit rejection simply on the grounds of reaching a certain age."
But that was far too radical for the banks. In their response, published in the last fortnight, they say "We will not be adopting this recommendation." Why? Well, they support the principle "We agree with the independent reviewer's aim to ensure that customers are not discriminated against simply because of their age."
But they won't actually be making sure it never happens, because "it is legitimate for a [bank or building society] to determine whether it offers credit to customers based on their ability to repay or to adequately secure a facility. This could include consideration of the age of the customer and the term of the borrowing."
So the banks will be free to say 'no' to a customer aged 72 who wants a credit card or a short term loan - just because that customer is in their seventies.
Shame on them. Among the other recommendations that were turned down was one which would have forced banks to warn customers when a short-term bonus rate on a savings account was about to come to an end.
Bonus rates are often used to entice customers into a savings account in the hope they won't notice when the rate drops sharply after twelve months.
They also refused to introduce a simple summary box setting out the terms of savings and loans after the sale so that people knew exactly what they had bought.
The banks (and building societies) also refused to implement a recommendation that the Code should begin with the words "We promise that we will act fairly and reasonably in all our dealings with you." That has been delayed for further consultation.
I wonder why?
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