Kristen Zanoni  |  July 2, 2020

Category: Covid-19

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Couple stressed out over bills; man holds sign that says "help"

 

The Financial Conduct Authority has confirmed that users of consumer credit products will receive extended support if they are continuing to experience payment difficulties to the COVID-19 pandemic.

The FCA’s framework for firms, announced July 1, outlines the options that will be provided for credit cards and other revolving credit, such as store cards and catalogue credit.

The outline also covers personal loan customers coming to the end of term of their payment freeze arrangements and for customers who have arranged for an interest-free overdraft of up to £500. Customers who have not applied for a payment freeze or an arranged interest-free overdraft of up to £500 will have until 31 October 2020 to request one.

“Since the coronavirus crisis began, we have made support available for those borrowers financially affected by the pandemic. For those who are now in a position to restart payments, it will be in their best interest to do so. But for those who still need it, the package we are confirming today ensures there is help and further support,” FCA interim chief executive Christopher Woolard said

So far, the FCA has confirmed the following, regarding continued support for consumer credit customers:

  • If customers can afford to return to their regularly scheduled repayment plans, or at least make partial payments, they should.
  • When customers are nearing the end of a first payment freeze, firms should get in touch with them to decide if they can resume payments and, if so, agree on a repayment plan. 
  • For customers who are still faced with payment difficulties as a result of the coronavirus pandemic, firms must continue to provide them with support, which includes payment freezes or payment reductions for three months. 
  • Individuals who have been negatively affected by the coronavirus and who already have an arranged interest-free overdraft can ask for up to £500 worth of continued interest-free overdrafts for another three months. 
  • Customers struggling with financial difficulties but who have not yet made agreements for a payment freeze or an interest-free overdraft of up to £500 may request one until 31 October 2020.
  • Payment freezes or partial payment freezes offered during the coronavirus outbreak should not negatively affect consumers’ creditworthiness. 

Close up of fanned-out stack of credit cards

The FCA adds that firms that are enforcing the guidance should be aware of the needs of vulnerable populations during this time. Firms are encouraged to help customers understand the kinds of help and resources available.

The FCA has confirmed it will not lengthen the interim general expectation regarding overdraft costs.

In April, the FCA asked all firms to temporarily safeguard all customers from being charged the same or more on overdraft fees after the overdraft rule was enforced. Just like before, firms will be able to create their own prices but overdraft customers who are financially affected by COVID-19 will continue to be able to ask for relief on any further borrowing up to £500.

If firms still decide to increase their overdraft prices, this temporary level should give customers the option to find additional support prior to any changes taking effect.

The FCA is still auditing overdraft pricing and on 1 July 2020 released an update on new overdraft pricing. The FCA has been requiring firms to remain transparent about their pricing and continue support for those affected by the coronavirus. 

It has been the mission of the FCA to provide support for the public’s financial hardships during the pandemic.

In April, the FCA announced that a 1.5 million payment holiday was granted and available to those who were negatively impacted by the coronavirus. Lloyds Bank was also fined £64 million by the FCA for treating mortgage customers unfairly. 

The FCA says they will continue to monitor firms on the progress of assisting customers through tough financial times. 

Do you think the measures taken by the FCA for financial relief have been helpful? Let us know in the comments.

We tell you about cash you can claim EVERY WEEK! Sign up for our free newsletter.

  • This field is for validation purposes and should be left unchanged.


Leave a Reply

Your email address will not be published. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Required fields are marked *

Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.