The Financial Conduct Authority (FCA) has announced a package of targeted temporary measures to help people with some of the most commonly used consumer credit products.
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 full range of measures will apply by Tuesday 14 April 2020.
The guidance now includes clarification on which products are in scope. In particular, the FCA are confirming 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. The guidance also applies to firms which have acquired such loans.
Christopher Woolard, interim Chief Executive at the FCA, said:
‘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’.
