Industry lending code needs major change, says The Money Charity

Today we’ve published our response to the independent review of the Lending Code, the industry code of conduct for financial institutions including banks, building societies, credit card companies and some debt collectors and debt purchasers.

Since the Code was written in 2010, regulation has moved on and the Financial Conduct Authority now oversees this sector. The Code needs to be rewritten to reflect this, and focus on where the Code’s provisions go beyond what’s already required of firms.

There are also areas of best practice that we think should be part of the Lending Code. These include:

  • Give control of overdraft and credit card limits to consumers – no more unsolicited increases.
  • Ensure that ‘minimum payments’ don’t keep customers endlessly in debt – stop the minimum payment automatically decreasing as the balance reduces.
  • Expand the indicators of financial difficulty to include customers who consistently pay the very minimum on a credit card bearing interest.

Read our full response here.