The FCA has published Guidance Consultation 16/6: The fair treatment of mortgage customers in payment shortfall: impact of automatic capitalisations (GC16/6). GC16/7 sets out a proposed remediation framework for customers who have suffered harm because of automatic capitalisation of payment shortfalls. The FCA has developed the framework with input from the industry working group which is intended to set out a proportionate, practical and fair approach for remediation. The framework is set out in Annex 2 and is supported by a “how to guide” in Annex 3 of GC16/6. Use of the framework is not mandatory, but the FCA expects firms to determine a remediation approach to achieve fair outcomes for affected customers.

The FCA intends to monitor the work carried out by firms to determine whether customers have suffered as a result of firms’ approach to remediation and will reserve the use of formal interventions such as enforcement action to deal with any unfair firm behaviour. The deadline for comments on GC16/6 is 18 January 2017.

View FCA consults on mortgage payment shortfall remediation guidance, 19 October 2016