A City watchdog has confirmed that it has updated the guidance to support and protect vulnerable customers during the coronavirus crisis.
The Financial Conduct Authority (FCA) flagged that it would update its guidance for lenders and credit companies earlier in November.
The 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. It will come into force on 25 November.
For starters, the guidance sets out that customers who have not yet had a payment deferral will be eligible to apply for payment deferrals of up to six months in total. Those that already have one will be eligible to apply for a further deferral. Although, if they do, the total length of those deferral cannot be longer than six months.
A firm may assess that a payment deferral is obviously not in a customer’s interest. In such cases, the firm should instead provide tailored support appropriate to the customer’s circumstances. Those who have reached the six-month limit will not be eligible for a further payment deferral, but firms can provide tailored support appropriate to their circumstances. This may include the option to defer further payments.
“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.”
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