FCA introduces temporary financial relief measures for consumers facing payment difficulties during the COVID-19 outbreak

Rule changes commence today and will be fully implemented by 14 April 2020

The Financial Conduct Authority (FCA) has introduced a package of temporary financial relief measures for consumers facing payment difficulties during the COVID-19 outbreak.

Having concluded a short consultation on proposals outlined last week to support people in financial difficulty due to coronavirus - that include a requirement for firms to offer consumers negatively impacted by coronavirus a temporary payment freeze on loans and credit cards for up to three months, and zero interest on up to £500 of arranged personal overdrafts - the FCA has confirmed it is introducing the measures from today and that they will be fully in place by 14 April 2020.

In addition, the FCA advises -

‘In response to the consultation, 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 today -

‘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.

'We know there is still more work to be done, and we will be announcing further measures to support consumers in other parts of the credit market in the future, including in the motor finance sector next week.'

FCA confirms temporary financial relief for customers impacted by coronavirus is available from fca.org.uk