Britain's FCA confirms fresh support for car finance, high cost credit customers

Britain's Financial Conduct Authority has granted cash-strapped motor finance borrowers and users of other high-cost, short-term credit the chance to freeze or reduce repayments on their debts for a further three months, it said on Wednesday.

Adds details

LONDON, July 15 (Reuters) - Britain's Financial Conduct Authority has granted cash-strapped motor finance borrowers and users of other high-cost, short-term credit the chance to freeze or reduce repayments on their debts for a further three months, it said on Wednesday.

"Our measures will ensure that people who are still facing temporary payment difficulties because of this pandemic, continue to have access to the help they need," said FCA Interim Chief Executive Christopher Woolard, who also encouraged borrowers who could afford to resume repayments to do so.

The FCA, which regulates business and consumer lending across Britain, announced its first support package for sub-prime and non-prime borrowers in April, shortly after a UK lockdown slashed household incomes and upended the economy.

Additional support is also being offered to 'buy-now-pay-later' and 'rent-to-own' customers, who will also have the opportunity to extend repayment terms.

Pawnbrokers must also offer to extend agreements within loan redemption periods or agree not to sell the item during the payment deferral period, if the redemption period has already ended, the FCA said.

A ban on repossessions of cars and goods owned by customers still facing temporary repayment difficulties caused by the COVID-19 pandemic will also remain in place until Oct. 31.

The FCA said firms should contact customers coming to the end of a first payment freeze to find out if they can resume payments and if so, agree a plan on how the missed payments could be repaid.

"When implementing this guidance, firms should be particularly aware of the needs of their vulnerable customers and should consider how they engage with them," the FCA said, confirming that payment freezes or partial payment freezes should not have a negative impact on credit files.

The guidance comes into force on July 17.

(Reporting By Sinead Cruise; editing by Emelia Sithole-Matarise)

((sinead.cruise@thomsonreuters.com; 020 7542 5154; Reuters Messaging: sinead.cruise.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More