The Financial Conduct Authority (FCA) has today (16 September 2020) announced additional guidance for firms on how to support users of consumer credit and overdraft products whose finances have been negatively impacted by Covid-19.
Reacting to the announcement, Richard Lane, Director of External Affairs here at StepChange, said:
“The FCA has recognised the unique circumstances that continue to face people whose finances have been negatively affected by the pandemic, but the effect may still be to leave them at serious financial disadvantage through no fault of their own. While we welcome the broad thrust of this new guidance, we have concerns that it leaves open the risk of different lenders adopting very different approaches, leaving customers caught in something of a lender lottery in terms of how their ongoing problems may be managed.
“We need to understand how lenders will implement the guidance in practice, but we welcome the strong signposting to debt advice that the FCA flags as an appropriate measure that lenders should put in place. With over 4 million people having built up significant debt as a result of the pandemic, we see it as vital that people shouldn’t be put in a situation where they experience long-term financial difficulty or exclusion as a result of measures taken to control the virus. Government support needs to complement regulatory action to achieve this.”