New bank code brought in

 

May 15, 2008

A new banking code has recently come into force, which could result in banks having to do more to help consumers that are in financial difficulties, and could make it the banks’ responsibility to ensure that consumers do not overload themselves with debt. The huge personal debt mountain in the UK has been at the centre of concern for years, and with the ongoing credit crunch making the situation even worse authorities are asking banks to do their bit to try and reduce increasing levels of consumer debt.

As part of the new banking code, which is a voluntary code, banks will have to contact any customers that they believe may be heading towards serious debt problems. Banks and buildings societies will also have to exercise far more caution when it comes to lending, and will have to practice more responsible lending. However, whilst some valuable areas have been addressed by the code, officials from the consumer campaign group Which? have said that the code should have addressed other areas such as raising minimum repayments on credit cards.

Angela Knight, chief executive of the British Bankers’ Association, said: “This new Banking Code gives strong commitments that banks will lend responsibly and will help customers who may be heading towards financial difficulties. People do panic when their money starts to go wrong; if they leave it alone it just gets worse. The long consultation process, now complete, has shown clearly what customers want and expect from their banks. That has been the driver for these changes.”

However, an official from Lloyds TSB said that customers still needed to take some responsibility to monitor their own affairs, stating: “People have to look at their own affairs. It is wrong to imagine that the banks are always going to be able to protect you when you are going to run into difficulties.”

Recent additions:

Written by admin · Filed Under Banking 

Comments

Got something to say?