Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
the acronym fca for Financial Conduct Authority concept represented by wooden letter tiles
November 19 2020

FCA updates guidance for struggling consumer credit customers

Michael Lloyd Industry News, News, Top 3 Covid-19, FCA, Sheldon Mills

The Financial Conduct Authority (FCA) has updated its guidance to consumer credit firms, regarding the support they must give borrowers experiencing payment difficulties during the pandemic.

The City watchdog’s updated guidance covers users of personal loans, credit cards, store cards, catalogue credit, rent to own, buy now pay later, pawnbroking, motor finance and high-cost short-term credit.

The guidance says that consumers that have not yet had a payment holiday will be eligible to apply for payment deferrals of up to six months, and those who currently have a payment deferral can apply for another one, as long as the total length doesn’t exceed six months.

Read more: Zopa extends support to borrowers impacted by Covid-19

Consumers who have previously had a payment holiday of less than six months will also be eligible to apply for a further payment deferral, as long as they don’t exceed six months in total.

If customers have already had six months of payment holidays, are in arrears, or the lender does not feel a payment deferral is appropriate, the FCA said lenders should provide tailored support appropriate to the customer’s circumstances.

And high-cost short-term credit consumers, such as those with payday loans, will be eligible for a payment deferral of just one month.

Read more: City regulator vows to take action on consumer lenders ignoring forbearance guidance

“It is in a consumer’s best interest to only take a payment deferral when absolutely necessary,” said Sheldon Mills, interim executive director of strategy and competition at the FCA.

“Those that are able to keep paying should do so.

“However, for those continuing to face payment difficulties as a result of coronavirus, these measures will ensure they continue to be able to access much needed support during this crisis.

“We also want to highlight that tailored support will still be offered and remains the most appropriate option for many borrowers.”

Read more: FCA reveals plan to limit open banking disruption post Brexit

The regulator said that tailored support may be reported on a consumer’s credit file while a payment holiday would not.

However, this does not mean that consumers’ ability to access credit will be unaffected, as lenders may take into account a range of information when making lending decisions.

The guidance will come into force on 25 November but the FCA has encouraged firms that are able to start providing this enhanced support sooner to do so.

EstateGuru partners with Varengold to enter German market Government support schemes have delivered almost £65.5bn to businesses

Related Posts

Dog at school

Industry News, News, Top 3

Five key takeaways from the fintech review

Closed sign

Industry News, News, Property, Top 3

The House Crowd goes into administration

investing

Industry News, News, Top 3

Government urged to modify EIS to promote lending

Popular posts:

  • The House Crowd goes into administration
  • RateSetter to stop investment withdrawals from 26 March
  • UK Finance calls for global fintech cooperation
  • Metro Bank plans to offer RateSetter lending through…
  • RateSetter confident of growing Metro Bank’s…
  • FCA puts the brakes on Buy2Let Cars
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by