FLA Good Practice Guidelines for second charge mortgage lenders

The Finance & Leasing Association (FLA) has launched new, consumer-facing, Good Practice Guidelines setting out what second charge mortgage customers encountering repayment difficulties can expect from their lenders.

The new Guidelines supplement the FLA's existing Code of Practice, which requires member companies to treat customers in difficulty sympathetically and positively. The Guide sets out the following key commitments:

To strongly encourage customers to seek free and independent money advice.

To discuss a repayment plan which is realistic, taking into account the customer's individual circumstances.

To ensure that the customer has a contact point who can answer their questions.

Not to take possession action where a reasonable repayment plan has been agreed and the customer is sticking to it.

At recent meetings with the Chancellor of the Exchequer, the FLA agreed that new Guidelines could usefully set out clearly how lenders can help customers with repayment problems. The Guidelines complement the work the Government is currently undertaking on responsible lending, which will result in additional industry guidance during 2009.

FLA Director General Stephen Sklaroff said: "FLA members are committed to treating customers facing repayment difficulties fairly and sympathetically. These new Guidelines will give customers the extra reassurance of knowing that the industry is doing everything it can to ensure that people facing problems in current economic circumstances are given the help and advice they need, and that repossession remains very much a last resort."