From 30 June, the clampdown on SARB firms includes a ban on ‘exploitative’ advertising and high-pressure selling techniques.
Lenders must not charge monthly arrears fees if a repayment method has been agreed.
Repayments must be used to pay arrears first, not charges, and lenders must exhaust all options before resorting to repossession. Firms must also record telephone calls discussing arrears and keep records for three years.
The CML said it welcomed the fact that smaller lenders could apply for a waiver on what it called the ‘draconian call-recording requirements’.
Alex Hammond, spokesman for Kensington, which was fined £1.2m for poor arrears practice in April, said: “Kensington has already introduced these measures and many others, including special servicing and customer liaison teams.”
