Changes to Banking Code
Following a review of the Banking Code, a number of changes will be implemented, including the transfer responsibility for dealing with debt from borrowers to lenders.
The changes being introduced include more help for customers heading towards financial difficulties, greater clarity of information on products and strengthened credit assessment practices.
Commenting on the upcoming changes to the Banking Code, Tim Moss, head of debt at price comparison site Moneysupermarket.com, said: “I am all for responsible lending, and this is certainly a step forward, but a good proportion of responsibility still lies with the customer.”
He also said, however, that responsibility still lies with consumers to manage their debt responsibly. He added: “There are many cases where a lender would have no idea what the customer gets up to. A typical example is where someone takes out a loan to consolidate their credit card balances and get their finances back under control. Instead of cutting their cards up, many see this as a licence to go on a spending spree again, putting them in a worse position.”