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16 September, 2020 Open access

FCA outlines proposals to ensure that firms provide tailored support to users of consumer credit and overdrafts who continue to face payment difficulties due to coronavirus

New guidance to cover period after current guidance allowing for payment freezes ends on 31 October 2020

The Financial Conduct Authority (FCA) has outlined proposals to ensure that firms provide tailored support to users of consumer credit and overdrafts who continue to face payment difficulties due to coronavirus (COVID-19) in the period after the current guidance to firms expires on 31 October 2020.

Introducing new draft guidance today, the FCA says that it will apply to consumers who have benefited from payment deferrals and support with the cost of their overdrafts under the current guidance as well as those whose financial situation may be newly affected by coronavirus, and that, if the guidance is confirmed, firms would be expected to -

In addition, the FCA says that it is proposing that firms contact overdraft customers who have received temporary support to determine if they still require assistance, and that, where a customer needs further support, firms should use measures such as reducing or waiving interest, agreeing a programme of staged reductions in the overdraft limit, or supporting customers to reduce their overdraft usage by transferring the debt.

NB - the deadline for comments on the draft guidance is 21 September 2020.

For more information, including links to the draft guidance, see FCA proposes the next stage of support for consumer credit and overdraft customers from fca.org.uk

Update - 30 September 2020 - the FCA has today confirmed the guidance for firms for the period beyond 31 Ocober 2020.