On 2 November 2020, the FCA issued a statement concerning consumer credit borrowers and the latest Government restrictions in response to the COVID-19 pandemic.
The FCA states that it will update its temporary guidance on personal loans, credit cards, motor finance, rent to own, buy-now pay-later, pawn broking and high-cost short-term credit to support consumer credit customers financially affected by the COVID-19 pandemic.
The FCA will propose that consumer credit customers who have not yet had a payment deferral under its July guidance can request one. This could last for up to 6 months unless it is not in the customer’s interests. Under the FCA’s proposals borrowers who are currently benefitting from a first payment deferral under the July guidance would be able to apply for a second deferral. For high-cost short-term credit (such as payday loans), consumers would be able to apply for a payment deferral of one month if they haven’t already had one.
The FCA adds that it is important that consumer credit customers who can afford to do so continue to make repayments. Borrowers should only take up the support if they need it.
The FCA will work with trade bodies and lenders on how to implement its proposals as quickly as possible, and will make another announcement shortly.