Consumer credit firms 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.
FCA said it is important that borrowers who can afford to make repayments continue to do so and urged consumers not to contact their lender until the enhanced measures are in place. Lenders will soon provide further information. Under the FCA’s proposals, borrowers would have until 31 January 2021 to request an initial payment deferral.
A survey of more than 7,000 people, conducted by the FCA during the Coronavirus pandemic, found 12 million people in the UK had low financial resilience, meaning they may struggle with bills or loan repayments. The data shows 2 million of those who are not financially resilient have become so since February. The FCA has put in place a package of support for people in difficulty to ensure help is available after 31 October
A move to short and daily rental highlighted in the latest LBF Quarterly Research is likely to be down to the current period of uncertainty as customers are reluctant to sign up to long contracts. Brokers have experienced more demand for shorter term solutions from businesses as well as consumers
New guidance from the Financial Conduct Authority covers users of credit cards and other revolving credit, personal loans, motor finance, buy-now pay-later (BNPL), rent-to-own (RTO), pawnbroking and high-cost short-term credit (HCSTC) products and overdrafts.
The FCA's January deadline is only a few months away and more uniform processes and disclosures may prove to be a much more difficult task than first imagined. Lenders have different commission models across their product ranges and as such the ‘nature’ of these, to use an FCA term, needs to be disclosed against each of them.
FCA proposes that customers buying a policy online should be charged the same price as a new customer buying online. Firms would be free to set new business prices, but they would be prevented from gradually increasing the renewal price to consumers over time (known as 'price walking') other than in line with changes in customers’ risk.
Quotevine Chief Executive Daniel Layne said some concerns remain over areas of the ban, and more clarity is needed – including specific definitions around which vehicles it applies to – as well as the potential for unintended consequences such as dealers exploiting the loophole left by excluding personal contract hire (PCH) from the changes, in order to make up lost revenue.
Authority says preventing the use of this type of commission would remove the financial incentive for brokers to increase the interest rate that a customer pays and give lenders more control over the prices customers pay for their motor finance.
The functions required to run your business – email, browsing, cloud, WiFi, software, hardware – are all vulnerable to attack, leaving you exposed to viruses, data breaches, loss of data and loss of connectivity.
There is concern that borrowers could face a negative equity situation at contract maturity, according to global credit ratings business DBRS Morningstar.