The new code of standards is designed to complement the bridging lender trade body’s existing code of practice.
Benson Hersh, chief executive of the Association of Short Term Lenders, said: “The purpose of this Charter is to encapsulate the ethos of the Association and sets out its objectives in unequivocal terms.
“The ASTL urges all bridging lenders who subscribe to these objectives to join it.”
The Value Charter requires members of the ASTL to:
• act in a professional manner, with honesty and integrity in their dealings with customers
• disclose all costs and fees up front, with no small print or misrepresentation of product offerings
• not charge non refundable fees which could be perceived as being excessive
• not issue terms nor charge fees where they do not expect to lend
• follow up customer complaints in a professional and speedy manner
• abide by the rules imposed by relevant regulatory authorities, trade bodies and the ASTL
Hersh said: “Bridging is not a cure-all for financial woes and should certainly not be regarded as last-resort borrowing.
“Clearly circumstances do change and sometimes unforeseen events can delay repayment of a bridging loan. In these cases a new loan or extended term may well be appropriate.
“Customers should be made aware of the cost of the loan – this is made up of several elements and does not only include interest. Customers should also be made aware of the costs involved should they not meet their commitments.”