The Finance & Leasing Association (FLA) has relaunched its lending Code.
The FLA Lending Code has been in force for twenty years, and the trade association says the updated code has a range of new protections for borrowers in financial difficulty, and new rights for users of store cards and short-term credit.
The Code is binding on all 50 FLA members in the consumer credit markets, and is subject to independent oversight. It includes a customer complaint service.
The Code has been updated to take account of recent changes in statutory regulation, including the new Consumer Credit Directive and the latest Office of Fair Trading Guidance.
It covers in detail all the key consumer credit markets and is now available in a new web-based format.
The new code includes a ban on commission payments for shop staff selling store cards, and a delay in discounts or other benefits for the first seven days after a store card is acquired.
It also contains a requirement on lenders to ensure customers are aware of the total cost of a short-term loan (including fees and charges) before they apply, and that the loan is not suitable for long-term borrowing.
There is a new restriction on the number of times a short-term loan can be extended to a maximum of three, coupled with a requirement that a new credit assessment be carried out each time.
Fiona Hoyle, head of consumer finance at the FLA, said: “The FLA Lending Code has been providing additional protection for credit customers for over 20 years.
