FCA announces proposals for further support for users of consumer credit who are facing financial difficulties due to coronavirus

Proposals include extending period in which people can request payment freeze to 31 October 2020

The Financial Conduct Authority (FCA) has announced proposals for further support for users of consumer credit who are facing financial difficulties due to coronavirus (COVID-19).

The FCA's proposals for new guidance to lenders supplying credit cards and other retail revolving credit, such as store cards and catalogue credit, personal loans and overdrafts, include that -

• for those who have yet to request a payment freeze or an arranged interest-free overdraft of up to £500, the time to apply for one would be extended until 31 October 2020; and
• for those who have already taken up support and are still experiencing temporary payment difficulties due to coronavirus, firms would continue to offer support with options including a further payment deferral or reducing payments to an amount the customer can afford for a further three months.

Commenting on the proposed guidance, Interim Chief Executive at the FCA Christopher Woolard said today -

'We have been working closely with other authorities, lenders and debt charities to support consumers in the current emergency. The proposals we’ve announced today would provide an expected minimum level of financial support for consumers who remain in, or enter, temporary financial difficulty due to coronavirus. Where consumers can afford to make payments, it is in their best long-term interest to do so, but for those who need help, it will be there.'

NB - the FCA also says that it welcomes comments on the proposals until 5pm on 22 June 2020, and expects to finalise the guidance shortly afterwards.

For more information, see FCA announces proposals to further support consumer credit customers from fca.org.uk