The FCA set forward new financial relief measures for consumers – full list
The FCA detailed that the measures are designed as a stop-gap to quickly support users of certain credit products who are facing financial difficulties. The package is designed to complement measures already laid out by the government.
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The proposals set forward cover a range of consumer issues including loans, overdrafts and credit cards.
The FCA detailed that they are still consulting on the proposed measures but they urge all stakeholders involved to respond asap, with the aim of enforcing new actions by 9 April.
The exact proposals put forward are:
• Set out the FCA’s expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus, for up to three months.
• Ensure that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500 will be charged at zero interest for up to three months.
• Require firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
• Ensure consumers using any of these temporary measures should not have their credit rating affected because of this.
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There is further clarity on these proposals on the FCAs website.
In commenting on these suggestions the FCAs Interim Chief Executive Christopher Woolard had the following to say: “Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK.
“If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time”
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Many organisations and charities have reacted positively to these commitments.
Some have called for affected companies such as banks and credit providers to step up and work with the FCA to ensure a quick rollout.
Justin Basini, the CEO and co-founder of ClearScore responded to the news: “This is a welcome intervention by the FCA and I compel banks to act on this proposal urgently in order to protect the many people who have been hit financially by the coronavirus crisis.
“Payment holidays and interest-free overdrafts will provide a much-needed lifeline for the countless people who won’t see relief from government schemes for many months, as well as the likes of the self-employed who have seen their access to pre-approved credit drop by up to 87 percent.”
Justin went on to provide specific recommendations for lenders as well as tips for struggling consumers: “However, I urge lenders to offer clarity on the long-term effects that using overdraft facilities and payment holidays can have on your finances and credit score.
“This will allow customers to be aware of all their options and will help them make the best decisions for their financial situation.
“For those that find themselves in financial difficulty, stay calm, reach out to your financial providers to ensure you take advantage of these new measures and to find out if there is anything else they can offer to help you.”
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