Consumers have won a victory in the banks' decision not to remove the principle of fairness from the decisions of the banking ombudsman, Consumer Affairs Minister Yvonne Henderson said today.
Mrs Henderson said the ombudsman was an outstanding success in protecting for bank users in disputes with the banks.
The Minister earlier attacked proposals by the banks to water down the powers of the ombudsman.
"There have been claims that the principle of fairness was to be deleted from the criteria used by the ombudsman. There is no doubt that to have done so would have undermined much of the ombudsman's effectiveness," she said.
"I am pleased that the ombudsman will still be able to make decisions with fairness as a guide."
Mrs Henderson said fairness was the major criterion used by the ombudsman.
"To abandon it would be to acknowledge that the banks do not have to be fair in dealing with customers' concerns."
One of Mrs Henderson's other concerns was that the banks proposed to prevent the ombudsman ruling on third-party cheque issues.
"The banks have in fact now removed from the ombudsman much of his power to deal with this issue, and this is contrary to the spirit of the scheme when it was set up," she said.
"I remain concerned that the banks are unhappy with the success of the ombudsman scheme and may continue to try to reduce its scope.
"The Government believes it would be preferable for the ombudsman's powers to be extended to cover, for instance, the concerns of small business and farmers, who are at present exempt."