The FCA has asked for all stakeholders to respond to the Proposals by 5pm on Monday 6 July and expects to finalise the Proposals shortly after this deadline.
The key points arising out of the Proposals are:
- At the end of a first payment deferral, customers should be contacted by firms in order to find out if they can resume payments. If they are able to resume payments, firms should work with customers to agree a plan as to how the missed payments can be repaid. If a customer can afford to, they should return to making regular repayments, providing it is in their best interests to do so.
- If customers have not yet had a payment deferral, they are able to request one up until 31 October 2020.
- Any customers who continue to need help should receive it. Customers experiencing payment difficulties as a result of coronavirus should: <br/>Receive support from firms by either freezing or reducing payments to a level they can afford on their motor finance, buy now pay later or rent to own agreements for a further three months.<br/>For buy now pay later customers, where a loan is within a promotional period, this would mean extending that period.<br/>For pawnbroking customers, where the loan is within the redemption period, this would mean firms extending that period for three months or agreeing not to sell or suspending the sale of an item for three months, if the redemption period has already finished.<br/>If a high cost short term credit customer has already had a payment deferral and is still experiencing payment difficulties, firms should provide a range of support, including formal forbearance, in accordance with the FCA Handbook.
- The ban on repossessions (in relation to motor finance and rent to own customers) should continue until 31 October 2020. This is applicable to customers still facing temporary difficulties as a result of coronavirus and who need their vehicle or goods.
- If a customer needs further temporary support, any full or partial payment deferrals offered under the Proposals should not have a detrimental impact on their credit files. However, customers must be mindful that lenders may use other sources of information when assessing creditworthiness.
The FCA has stated that in implementing the Proposals when finalised, firms should be particularly aware of the needs of vulnerable customers and consider how they engage with them. This would include firms helping customers understand the types of debt assistance and money guidance that are available to them and providing assistance in accessing such resources.
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