About the LSB
Driving fair customer outcomes
Driving fair customer outcomes
Our mission is to drive fair customer outcomes within financial services through independent oversight.
The LSB covers both personal and business customers of financial services. We are independent in our approach to setting standards and to overseeing compliance with those standards. The Standards and Codes we set and oversee currently cover:
- Asset Finance
- Access to Banking
- Authorised Push Payment Scams
We are now looking to build on the credibility we have gained in our first decade by raising the bar higher on standards for financial services in our second decade. We aim to achieve fair outcomes for consumers, both business and personal, by:
• Setting high standards: setting and enhancing outcome standards for customers within financial services. The LSB will draw on the evidence of its oversight work to develop the Standards and Codes for which it is already responsible. We shall set standards in new areas where the LSB’s rigour can add value for consumers and where the industry and regulators support our involvement.
• Delivering independent oversight: providing robust and independent oversight of the Standards and Codes for which we are responsible. The LSB will continue to undertake a programme of compliance work which gives assurance that our Standards are being adhered to, which highlights good practice and which ensures breaches are identified and remedied.
• Reaching wider: leading thinking within the industry by undertaking research, by disseminating good practice and by broadening the range of firms to which the Standards apply. The LSB will commission research and draw on its oversight work to raise firms’ awareness of what approaches improve outcomes for consumers, including how technology can be harnessed to improve services. We shall also encourage new firms to embrace our Standards and oversight in order to increase our coverage of the market and the number of consumers benefiting from the Standards.
• Raising awareness: raising the profile of the LSB’s work and of the Standards and Codes we oversee so that firms see the advantages of registering with the LSB, so that the boards and senior executive teams of participating firms set store by our findings in developing their services for customers and so that organisations working with consumers are informed about our work and its implications. We also want consumers themselves to have a clearer understanding of what standards they should expect when using relevant services.
Read more about our work in our 2020-2021 Business Plan.
We are funded by our registered firms but we operate as an independent body, governed and overseen by an independent Board composed of Non-Executive Directors.
Promoting and helping deliver fair outcomes and greater consistency for personal and small business borrowers
Through the Standards of Lending Practice, the LSB protects consumers and small businesses in areas not covered by existing regulation.
Improving customer outcomes
Identifying and sharing best practice supports the achievement of desired customer outcomes. In addition to our assurance work, we actively seek input from consumer groups, debt advice bodies and other industry stakeholders. When we identify areas where improvements might be achieved, we hold discussions with the industry with the aim of adopting them in the form of new guidance or strengthened Standards.
A dynamic process
The LSB continually researches areas of potential or emerging customer detriment. We propose new standards supported by best practice where these are not covered by detailed FCA rules or elsewhere. Recent examples have been supporting customers in vulnerable circumstances, understanding the challenges registered firms face in the digital space and helping firms to identify customers displaying early signs of financial difficulty. Click here to view some of the work we have done in this area.
Achieving high level of market coverage of personal and business lenders
To have credibility, self-regulation also requires significant market coverage amongst those firms that provide in-scope products and services. We have substantial market coverage from firms that have committed to adhering to the Standards of Lending Practice.
Branching out into new areas of lending
In 2014, the LSB extended self-regulation to Debt Collection agencies (DCAs) and Debt Purchase firms (DPFs). As we extend our product scope, we expect to attract a broader range of firms.
Demonstrating how self-regulation can deliver good customer outcomes and can complement the work of the FCA
We believe that a proportionate approach to regulation balances adequate consumer protection and a properly functioning competitive market. The LSB maintains an effective, collaborative relationship with the FCA and takes great care to complement, rather than duplicate, the work of industry regulators. This approach delivers a range of advantages that benefit not only the customer but the industry as a whole:
- The ability to set standards in areas not covered by the FCA or other regulators leads to greater protection for customers;
- The development of best practice to improve customer outcomes and greater consistency of treatment;
- Changes to the Standards and the Information for Practitioners (for personal and business customers) can be implemented much faster than statutory rules, allowing us to respond rapidly to emerging issues; and
- A cost-effective approach benefits both firms and their customers who ultimately bear the costs of regulation.
Adding value for registered firms
Adhering to the Standards of Lending Practice adds value to firms in a number of ways:
- By enhancing their reputation, helping them and the wider industry, rebuild trust;
- By demonstrating a firm’s engagement with our development and research work which helps improve and enhance self-regulation;
- By highlighting a commitment to fair lending to your customers and prospective customers;
- By demonstrating to regulators, government and opinion formers that you are committed to treating your customers fairly; and
- By providing a credible regime that complements statutory regulation.
The initiatives we take
Committing to the Standards of Lending Practice is a mark of trust, reassurance and integrity. We support and enhance credibility through proactive, robust, independent oversight that promotes the achievement of fair customer outcomes.
Regular reviews and updates ensure the Standards are robust, responsive and relevant. Needless to say, we expect all Firms applying for registration to provide comprehensive evidence of how they meet our Standards.
Gathering and sharing best practice also plays a key role in helping Firms to improve customer outcomes, whether via collaborative workshops, publishing research and reviews, or the provision of informal advice and guidance.
Read more about the added value of LSB registration
Developing close relationships with a range of stakeholders
In addition to our relationships with firms we value our ever-expanding relationships with regulators, government, trade associations and consumer and civil society organisations. Working collaboratively with external stakeholders supports the delivery of our vision of ensuring all personal and small business customers receive a fair deal from their lender – in an environment of greater trust between customers and the industry.
Financial Conduct Authority (FCA)
For the benefit of registered firms and their customers, we work closely with the FCA to ensure our work is complementary to statutory regulation. A formal memorandum of understanding is in place in order to provide a framework for our relationship.
We enjoy a positive relationship with the Treasury who, for example, requested that we undertake oversight of the Access to Banking Standard. The Treasury has also encouraged us to develop the Standards of Lending Practice for business customers and is supportive of our work to improve protections for SMEs.
Financial Ombudsman Service (FOS)
We stay in close contact with the FOS. We have an agreed Statement of Roles and Responsibilities which sets out a framework for discussions and co-operation. Feedback from the FOS on existing and new classes of complaints provides an important input to the development of our work.
Single Financial Guidance Body (SFGB)
Although we do not provide direct financial guidance to consumers, we work collaboratively with the SFGB providing guidance on best practice as well as support for oversight and assurance frameworks.
Credit Services Association (CSA)
We maintain a close working relationship with the CSA, with whom we have a memorandum of understanding and whose chief executive attends our Board as an observer. We continue to develop this relationship as more debt collection and debt purchase firms register.
Other trade associations
We also regularly meet with representatives of other key trade bodies such as UK Finance, the Building Societies Association, the Finance and Leasing Association and the Federation of Small Businesses.
Debt advice charities
The LSB enjoys a close working relationship with the key debt advice charities such as the Money Advice Trust, StepChange, Citizens Advice and Christians Against Poverty. Regular contact provides access to valuable market intelligence, real-world information and research – all key elements in our oversight work and the identification of emerging issues.
Watch our video
Watch our video and hear more from the LSB team.
This video production was created by ITN Productions, in collaboration with the Chartered Institute of Credit Management (CICM).