FCA suggests new support to help borrowers affected by Covid-19

The Financial Conduct Authority (FCA) has announced more ways to support borrowers affected by the pandemic.

The City watchdog flagged that it was planning to propose new support measures earlier this week, adding to the effort first announced in September.

The new proposals would extend payment deferrals and other support to personal loans, credit cards, motor finance, rent-to-own, buy now pay later and pawnbroking customers who are experiencing payment difficulties because of coronavirus.

The extended measures would mean that those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total. Additionally, those who currently have an initial payment deferral, will be eligible for a further payment deferral of up to three.

Under the FCA’s proposals, borrowers would have until 31 January 2021 to request an initial payment deferral.

“We recognise the challenges that many consumers face as the coronavirus crisis develops, and we are working to ensure support remains available to consumers who need it,” said Sheldon Mills, interim executive director of strategy and competition at the FCA.

“We know that many consumer credit borrowers are vulnerable. That’s why tailored support reflecting borrowers’ individual circumstances will still be offered and remains the most appropriate option for many. We are also proposing to extend payment deferrals for some consumer credit products to offer additional support.

“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so. We are also asking borrowers not to contact their lender yet, and instead wait for further updates, including from their lenders, soon.”

The FCA is asking for comment on the proposals by 10am on Friday 6 November with the final guidance published as soon as possible after the comment period closes.

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