The implementation of a new lending code, which is due to come into effect on November 1st, will better protect consumers in their borrowing activities.
This is the opinion of Robert Skinner, chief executive of the Lending Standards Board (LSB), which is overseeing the introduction of the reformed industry standards.
He observed that the LSB will be working towards monitoring and enforcing the code “and take action where lenders fall short of the [its] standards”.
Contained within the upcoming guidelines include rules applying to credit assessment and the use of credit reference agencies and debt collection, as well as the offer of help to those debtors suffering with mental health issues.
It will also cover several elements laid out in the old banking code, while detailing good practice in terms of unsecured loans and lending on credit and charge cards.
In related news, the Financial Services Authority recently unveiled plans to reform the mortgage market in order to service consumers more effectively, by bringing in measures such as affordability tests.
By Sarah Adie