FOLLOWING a period of consultation, the Financial Conduct Authority has published finalised guidance on consumer credit support effective from Jamuary 31.
The guidance has been updated so that firms will be able to repossess goods and vehicles from January 31 but only as a last resort, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding.
Importantly, firms will also need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate.
The FCA said its approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home at this time.
Support available for consumers
Support continues to be available for those experiencing financial difficulties because of coronavirus. This could mean taking a payment holiday or receiving tailored support and applies to motor finance, including hire-purchase and leasing agreements.
This is time agreed with the lender to make no or reduced payments. A payment holiday can be requested for up to 6 months in total, but lenders can only agree a payment holiday of up to 3 months at a time. For high-cost short-term credit, a one month payment holiday can be applied for by 31 March and can be extended up to July 31 when all payment holidays will come to an end.
