FCA offers new guidance for firms on how to support credit customers affected by Covid-19

From: RegTech Analyst

It’s hardly a secret that many people are facing a lot off financial hardship because of the coronavirus. That’s why the Financial Conduct Authority (FCA) offered more guidance to credit customers affected by the virus.

The regulator has confirmed the support users of certain consumer credit products will receive if they are still experiencing temporary payment difficulties due to coronavirus.

The measures outline the options firms will provide credit card and other revolving credit – such as store card and catalogue credit – and personal loan customers who are coming to the end of a payment freeze and for customers who have agreed an arranged interest-free overdraft of up to £500. Customers yet to request a payment freeze or an arranged interest-free overdraft of up to £500, will have until 31 October 2020 to apply for one. That being said, the FCA noted that if customers can afford to return to regular repayment, or make partial payments, it is in their best interest to do so.

“Since the coronavirus crisis began, we have made support available for those borrowers financially affected by the pandemic,” said Christopher Woolard, interim chief Eeecutive at the FCA. “For those who are now in a position to restart payments, it will be in their best interests to do so. But for those who still need it, the package we are confirming today ensures there is help and further support.”

Firms should contact customers coming to the end of a first payment freeze to find out if they can resume payments and to agree a plan on how the missed payments could be repaid. For customers still facing temporary payment difficulties as a result of coronavirus, the regulator argued that firms will provide them with support, which could include freezing or reducing payments on their credit card and personal loans to a level they can afford for three months.

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