The Lending Standards Board (LSB) has launched its new Lending Code, which is designed to ensure customers are treated fairly by banks and financial providers .

Co-sponsored by the British Bankers' Association, the Building Societies Association and the UK Cards Association, the code sets out best practice for lenders and takes effect from today (November 2nd).

This covers various aspects of the provision of credit cards, overdrafts and unsecured loans, including the use of credit reference agencies, debt collection, customers with mental health problems and risk-based pricing.

The Lending Code sets out what it means to be a responsible lender covering both credit assessment and the support that will be available if things go wrong, said Robert Skinner, chief executive of the LSB.

He also said that the code should strengthen consumer protection and the LSB will take action when lenders are found to have fallen short of the code's guidelines in their relationship with customers.

The LSB replaces the Banking Code Standards Board following the transfer of responsibility for the regulation of some bank and building society products to the Financial Services Authority from the start of November.