On 12 January 2021, the FCA announced that it was conducting a short consultation regarding updating its guidance for firms on the treatment of mortgage and consumer credit customers facing repossession.
The FCA’s current guidance on mortgage repossessions means firms should not enforce repossessions before 31 January 2021 except in exceptional circumstances, such as a customer requesting that proceedings continue. The FCA proposes extending this guidance so that firms should not enforce repossessions before 1 April 2021.
The FCA is proposing to change its current guidance for consumer credit firms so that they will be able to repossess goods and vehicles from 31 January 2021. However, this should only be as a last resort, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding. Firms will also be expected to consider the impact on customers who may be vulnerable, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate. Also, firms should take into account the financial impact of delaying repossession, including asset depreciation, and the wider impact of repossession on such customers. Firms are also expected to treat customers fairly in considering whether and when to take steps to default or terminate the agreement and should comply with applicable Consumer Credit Act 1974 provisions such as section 87 in respect of default notices and section 90 in respect of hire purchase goods.
The deadline for comments on these proposals is 18 January 2021.