FCA calls on lenders to support consumers with cost of living crisis

The Financial Conduct Authority (FCA) has asked lenders to help consumers deal with the cost-of-living crisis as consumers continue to bear the brunt.

With household bills expected to rise even further this autumn, the FCA said it was important that companies act now to make sure borrowers that are struggling with payments and vulnerable customers are able to get the help they need.

The FCA looked at how borrowers in financial difficulty are currently treated by lenders, with a mix seen across the industry. The authority said it was concerned that some lenders were not discussing the potential benefits of money guidance and free debt advice as well as helping borrowers gain access to these.

In addition, the FCA is reminding lenders that they should provide support to struggling borrowers that is tailored to their own circumstances and only charge them fees that are fair and cover the company’s costs.

The FCA called on lenders in the letter to make sure that their approach to taking on new borrowers ‘takes account of the financial pressure they may face and the impact on their expenditure’ and also improves how they treat customers in vulnerable circumstances.

FCA said, “People who are struggling to manage their finances should speak to their lenders for support as early as they can. They can also get free support and advice, for example, through the MoneyHelper service.”

FCA executive director of consumers and competition Sheldon Mills added, “Many consumers are feeling the impact of the rising cost of living in their personal finances and we expect this to increase over the next few months. Early action is important for those struggling with debt. We need all firms to get the basics right and provide good quality support. Where we see more serious wrongdoing, we are already acting to ensure these firms improve.

“The financial services industry has a significant role in helping consumers manage their finances – and it should expect us to pay close attention to how they do that over the next few months.”

The FCA recently published a paper on potential reforms on how companies list in the UK, with the aim to attract more “high quality, growth companies and give investors greater opportunities.”

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