On 3 February 2020, the FCA published a Dear CEO letter on its approach to customers who have been in persistent debt for 36 months (PD36). This follows the FCA’s review of the approach of a collection of firms’ PD36 strategies, which has identified a few key areas of concern:

  • Treatment of PD36 customers. The FCA is concerned that some customers may not respond to a firm’s communications about being in persistent debt. Firms are expected to ask the customer to make contact to confirm their situation. Where firms are proposing repayment options that are not reasonable and sustainable for customers, they should make the customer aware that they will be in a better position if they contact the firm as they are entitled to receive forbearance. Firms should also ensure that PD36 communications provide details of not-for-profit debt advice bodies and encourage contact with them.
  • Card suspensions. The FCA is concerned that some firms may be planning a blanket suspension of credit cards for all PD36 customers. The FCA reminds firms that they must serve customers with a notice when choosing to suspend or cancel a customer’s access to credit and those reasons must be objectively justified. There is no regulatory requirement for a card to be suspended where a customer is in persistent debt and therefore an objective justification could not rely on such a requirement.
  • Operational readiness. Firms must be operationally ready to deliver their PD36 interventions in line with regulatory requirements. This includes consideration of the people, processes (including all communications) and systems impacts and requirements to deliver competent customer engagements.