Financial firms to help customers in lockdown
The financial services regulator, the FCA*, has instructed firms to help customers with debt problems caused by the lockdown period.
What has been said?
The FCA have told lenders they can use new guidelines to help customers who have debt repayment problems, if those problems have been caused by the effects of the current lockdown.
This means that, where customers have lost income or their jobs as a direct result, lenders can help customers.
What can lenders do to help?
• Offer a 3 month payment freeze on loans and credit cards
• Offer up to £500 on overdraft at 0% interest for 3 months
• Ensure customers do not face higher charges on overdrafts as a result
• Ensure customers using this temporary guidance do not have their credit record affected.
What if I’m not affected financially, or if debt problems are not as a result of the lockdown?
The FCA have said in these cases, normal payments should be made by customers. If customers are behind with payments for another reason, normal rules should apply.
Christopher Woolard, of the FCA, explained;
“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.”
Sources & Notes
*FCA – The Financial Conduct Authority are the government appointed regulator for financial services firms. They have powers to instruct regulated firms how to treat customers.