Plans to support people paying off motor vehichle finance, payday loans, buy now pay later deals and pawn brokers have been revealed by the Financial Conduct Authority.
The FCA expects firms to provide a 3-month payment freeze to customers who are having temporary difficulties meeting finance or leasing payments due to coronavirus. If customers are experiencing temporary financial difficulties due to coronavirus, firms should not take steps to end the agreement or repossess the vehicle.
They are proposing that payday lending firms will be expected to provide a 1 month interest-free payment freeze to customers facing payment difficulties due to the coronavirus pandemic.
Christopher Woolard, interim Chief Executive at the FCA, said:
‘We are very aware of the continued struggle people are facing as a result of the pandemic. These measures build on the interventions we announced last week, and will provide much needed relief to consumers during these difficult times.
‘We have tailored our measures to specific products. For most of these proposals, firms and consumers should consider the amount of interest which may build up, and balance this against the need for immediate temporary support. If a payment freeze isn’t in the customer’s interests, firms should offer an alternative solution, potentially including the waiving of interest and charges or rescheduling the term of the loan.’
