The Financial Conduct Authority (FCA) has confirmed a package of temporary measures to provide financial relief with some of the most commonly used consumer credit products.
The measures announced are designed to provide people affected with payment difficulties with short-term financial support through during the coronavirus (Covid-19) pandemic.
The changes will provide support for consumers with credit cards, loans and overdrafts, facing temporary financial difficulties because of the pandemic.
The FCA will be announcing further measures to support consumers in other parts of the credit market in the future, including in the motor finance sector next week.
The measures include firms being expected to:
- offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by coronavirus
- allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months
- make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force
- ensure consumers using any of these temporary payment freeze measures will not have their credit file affected
The rule changes will be in force from today and the full range of measures will apply by Tuesday 14 April 2020. This is to allow firms time to ensure they have the appropriate level of resources available to handle customer requests.
All firms will be ready to receive customer requests by 14 April, although some firms including the major banks and building societies, will be adopting the changes today.
Consumers should check websites or social media posts for more information, and where possible use online services to request assistance as call centres are experiencing a high demand in calls due to the current pandemic situation.
The FCA have confirmed that the following products are covered: guarantor loans, logbook loans, home collected credit, a loan issued by Community Development Finance Institution and some loans issued by credit unions, but only where these are regulated.
These measures won’t replace normal forbearance rules where these would be more suitable for a consumer in serious and immediate financial difficulty. Consumers in financial difficulty should contact the Money Advice Service (MAS) for further guidance.
Press Release – FCA confirms temporary financial relief for customers impacted by coronavirus