On 25 March 2021, the FCA published the findings from its multi-firm review where it considered mortgage and consumer credit firms’ implementation of the September 2020 Tailored Support Guidance (TSG) covering mortgages, consumer credit and overdrafts and the operational readiness of firms to support customers in financial difficulty.
The key findings from the FCA review include:
- Firms have progressed well in implementing the TSG and have acted quickly to build their capacity to support consumers.
- In general customers have been able to get support as they exit payment deferrals. The support identified in the FCA’s work has typically been short term in nature given the uncertainty of customers’ financial circumstances during the pandemic.
- The FCA’s monitoring of lenders’ operational readiness to support customers, during this period, has not identified any systemic issues with firms’ ability to meet the demand from customers seeking further help.
- The review of firms’ training and competence policies and in particular the assurance and oversight completed by them has identified that the significant increase in inexperienced staff helping customers may lead to an increased risk of harm.
- A number of firms have accelerated plans to automate aspects of the customer forbearance journey. The use of automated approaches can be helpful to customers although further enhancements to some of the digital processes seen would be beneficial, for example clear signposting of non-digital support or the recording of new vulnerabilities.
The FCA states that all lenders should review the findings from the review and assure themselves that they have embedded and implemented the TSG within their firm.
More widely, and given the amount of time the TSG and other COVID-related forbearance has been in effect for, businesses may also find it helpful to consider and review the effectiveness, fairness and consistency of the forbearance they have been offering during this period in the context of both learning lessons for the future and ensuring that poor outcomes and detriment have not occurred.