Improved Lending Policy

• For new customers HBOS takes lending from non-HBOS institutions into consideration, to understand total indebtedness before making a lending decision.  At the same time, for existing customers we compare third party customer data against our own customer book on a monthly basis, to understand any changes to their total borrowing and highlights any cases of rising indebtedness.
• Risk-based pricing allows us to reward customers with a history of prudent borrowing with a lower rate of interest.  In order to make responsible lending decisions, we need as much information about an applicant as possible.  This allows us to assess a rate of repayment at a level that matches their personal circumstances.
• If our customers do have problems, then we work together to address them. We try at first to make arrangements where the customer can pay back the arrears. If unable to do this, we recommend that the customer go to a non fee-charging agency for a full financial assessment. We also refer customers to free debt advice agencies – Consumer Credit Counselling Service, Payplan or the Citizens Advice Bureau – and we always accept an arrangement from them, including freezing interest and stopping charges for an agreed period.

More detailed information on responsible lending can be found in our Corporate Responsibility Report .