Our Affordable Credit Code of Good Practice sets out the principles and practices that support responsible lending that is aligned with the needs of customers in financially vulnerable circumstances.
The Code was originally developed in 2020 through consultation with stakeholders and informed by our Affordable Credit Scale Up Programme. It has since been updated to include commercial lenders and to reflect the evolving regulatory environment.
We expect all lenders that we work with to comply with the Affordable Credit Code of Good Practice, or to have credible plans to work towards complying with it.
The Code closely aligns with many of the existing expectations of the FCA’s Consumer Duty, including:
- Appropriate partnership arrangements with third parties to encourage and support potential or current customers in financial difficulty to access free debt advice and/or gambling help
- Appropriate in-house specialist support, partnership or referral arrangements to ensure that customers identified as having very significant or complex levels of need or vulnerability can be supported
- Embedded benefit entitlement and income maximisation calculators and financial difficulty support processes
- Must demonstrate an empathetic approach to arrears and debt recovery. This will make clear how the lender seeks to understand the customer’s current circumstances and suggests potential solutions with that knowledge to deliver good customer outcomes
- Customers should have the option to repay early with no additional costs. Payment holidays and breathing space should be provided as with other lending product
