12:56 PM, 9th April 2020, About A year ago 1
Following a short consultation the Financial Conduct Authority (FCA) will be going ahead with the proposals, which will give lenders the flexibility under to provide temporary financial relief to those facing payment difficulties during the coronavirus pandemic. 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
Christopher Woolard, interim Chief Executive at the FCA, said: “We know many people are suffering financial pressures brought on as a result of the coronavirus pandemic. The measures we’ve announced are designed to provide people affected with short-term financial support through what could be a very difficult time. The changes will provide support for consumers with credit cards, loans and overdrafts, facing temporary financial difficulties because of the pandemic.
“Customers should think carefully before making use of these measures and only do so if they need immediate help. Where they can still afford to make payments, they should continue to do so.
“We know there is still more work to be done, and we 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 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 firm websites or social media posts for more information, and where possible use online services to request assistance. This will reduce the pressure on firm call centres who are experiencing a high demand in calls due to the current pandemic situation. If consumers need to get in touch by telephone please be patient and, if you can, wait until after the Easter weekend, even if your lender is offering help sooner than the 14 April 2020.
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