Responding to today’s (13 January) proposals from the Financial Conduct Authority on amendments to its tailored treatment requirements for people experiencing financial difficulty due to coronavirus, we give a cautious welcome and urge the regulator to strengthen the requirement on firms to refer people to holistic debt advice services.
Peter Tutton, Head of Policy here at StepChange, says:
“We called last week for mortgage repossessions to be halted until after the pandemic lockdown has ended, so we’re pleased to see today’s proposal from the Financial Conduct Authority to implement this until April.
"However, we’re concerned about the potential impact of the FCA’s proposal to allow repossession of goods and vehicles in some circumstances after 31 January – customers affected tend to be more vulnerable and some creditors have historically pursued repossession prematurely, which may not square entirely with the FCA urging firms to treat this as a last resort.
"It’s vital that the FCA not only sets out strong protections, but also monitors the response of creditors and uses its supervision powers to enforce the guidance. For people experiencing debt during the pandemic, the consequences may create real and ongoing hardship even after the public health crisis ends.
"So it’s particularly important that there is a strong referral system to debt advice organisations for people who are at risk of serious consequences from debt, and we would like to see the FCA strengthen its requirements of firms to refer people to debt advice organisations who can help people plan a way to address all their debt in the round.”