Better protection for borrowers

Customers borrowing money will get greater protection under the new Lending Code which comes into effect at the beginning of November.

The Code sets rules that lenders must follow when providing overdrafts, credit cards, charge cards, and loans to personal and small business customers.

The Code will be independently monitored and enforced by the Lending Standards Board and includes requirements covering:

credit assessment and the use of credit reference agencies
the risk based pricing principles for credit cards
financial difficulties and debt collection
helping customers in debt who have a mental health condition

Robert Skinner chief executive of the Lending Standards Board said: "The Lending Code sets out what it means to be a responsible lender covering both credit assessment and the support that will be available if things go wrong. It will be followed by all significant providers of credit products who currently subscribe to the Banking Codes."

The new provisions come into effect on 1 November when responsibility for the non-lending aspects of the Banking Codes moves to the FSA.