Tag: COVID-19

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FCA publishes extended finalised guidance: ‘Cancellations and refunds: Helping consumers with rights and routes to refunds’

On 1 April 2021, the UK Financial Conduct Authority published a press release and extended finalised guidance (aimed mainly at insurance providers, and credit and debit card providers) on helping consumers with rights and routes to refunds.

The FCA had published finalised guidance in October 2020, but this was due to lapse on 2 April 2021. The extended finalised guidance takes effect from 2 April 2021 and, unlike the earlier guidance, “remains in place during the exceptional circumstances arising out of Covid-19 until varied or revoked”.

The guidance for credit card and debt card providers says:

– The FCA expects credit and debit card providers to handle section 75 and chargeback claims “in a reasonable timescale”, and FCA reminds firms of their obligations to treat customers fairly.

– If there are delays in processing claims, the FCA expects firms to clearly explain the reason for the delay.

– If a credit or debit card provider declines a consumer’s section 75 or chargeback claim, the FCA expects they should “explain the reasons for this clearly and fairly and explain any further options that the customer might have. This might include checking to see if they are covered under a policy of travel insurance, including policies held as part of a packaged bank account”.

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Pay.UK publishes report on impact of COVID-19 on current account switching behaviours

On 6 January 2021, Pay.UK published a report on how COVID-19 has affected current account switching attitudes and behaviours for in the United Kingdom.

The report says:

– current account switching in 2020 was 30% lower than previous years;

– consumer attitudes towards current account switching and the Current Account Switch Service “remain positive and largely unchanged“;

– the availability of switching rewards and differentiation in prices fell whilst consumer vulnerability increased “significantly“;

– attitudinal factors have “seen less change“;

– gig economy works have been disproportionately impacted by COVID-19;

– young people (ie aged 18 to 34) have also been disproportionately impacted relative to older age groups;

– priorities have changed for small and medium enterprises (for example, they place less importance on branch access); and

– identifying and targeting support, interventions and remedies at the most affected groups is “a sensible strategy“.

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FCA announces further proposals to support consumer credit customers impacted by COVID-19

Earlier today, on 4 November 2020, the UK Financial Conduct Authority published a press release setting out its further proposals to support consumer credit customers impacted by COVID-19.

There is:

– a draft updated guidance for consumer credit firms;

– a draft further updated temporary guidance for personal loans;

– a draft further updated temporary guidance for credit cards (including retail revolving credit cards);

– a draft further updated temporary guidance for motor finance;

– a draft further updated temporary guidance for high-cost short-term credit;

– a draft further updated temporary guidance for rent-to-own, buy-now pay-later and pawnbroking agreements; and

– a draft Consumer Credit Instrument updating provisions in CONC 6.7 and 7.3.

The FCA proposes:

– those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total;

– those who have had one payment deferral, will be eligible for another payment deferral of up to three months;

– those with high-cost short-term credit agreements, who have not yet had a deferral, can ask for a one month deferral but no more;

– to allow customers until 31 January 2021 to ask for a payment deferral;

– if a customer has restarted payments after a deferral, they are not entitled to another deferral but should receive tailored support if they are experiencing payment difficulties.

– if customers can afford to make repayments then they should continue to do so;

– borrowers should hold off contacting their lender until the enhanced measures are in place;

– lenders should hold off repossessions of goods, unless there are exceptional circumstances, until 31 January 2021; and

The FCA also proposes to maintain the existing position on overdrafts and premium finance.

The FCA has invited comments by 10am on 6 November 2020.

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FCA announces further proposals to support mortgage borrowers impacted by COVID-19

Late yesterday afternoon, on 2 November 2020, the UK Financial Conduct Authority published a press release setting out its further proposals to support mortgage borrowers impacted by COVID-19. There is a draft further updated guidance for firms and a draft updated additional guidance for firms.

The FCA proposes:

– those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total;

– those who have had one payment deferral, will be eligible for another payment deferral of up to three months;

– those who have restarted repayments after an initial payment deferral will be eligible for another payment deferral of up to three months; 

– to allow borrowers until 31 January 2021 to ask for a payment deferral;

– if borrowers can afford to make repayments then they should continue to do so;

– borrowers should hold off contacting their lender until the enhanced measures are in place; and

– to stop any repossessions (without the borrower’s consent) before 31 January 2021.

The FCA has invited comments by 10am on 5 November 2020.

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FCA to announce further support for consumer credit borrowers impacted by COVID-19

On 2 November 2020, and following the Prime Minister’s announcement of a further month-long lockdown for England, the UK Financial Conduct Authority issued a press release saying it will announce further support for consumer credit customers impacted by COVID-19.

It seems likely that:

– If a borrower has not yet had deferral already because they are unable to make their repayments because of COVID-19, they will be entitled to ask for a deferral. This could last (depending on the product) for up to six months.

– If a borrower (other than one under a high-cost short-term credit agreement) has already had a payment deferral because of COVID-19, they will be entitled to ask for another deferral.

– If a borrower has already had already benefitted from payment deferrals, and are still unable to make their repayments because of COVID-19, they will need to contact their lender for ‘tailored support’.

The FCA reminds borrowers that “consumer credit customers who can afford to do so continue to make repayments. Borrowers should only take up this support if they need it”.

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FCA to announce further support for mortgage borrowers

On 31 October 2020, and following the Prime Minister’s announcement of a further month-long lockdown for England, the UK Financial Conduct Authority issued a press release saying it will announce further support for mortgage borrowers on 2 November 2020.

It seems likely that:

– If a mortgage borrower has not had deferral already because they are unable to make their repayments because of COVID-19, they will be entitled to ask for deferral of up to six months.

– If a mortgage borrower has already had a payment deferral because of COVID-19 of less than six months, they will be entitled to ask for another deferral so the maximum total deferral is six months.

– If a mortgage borrower has already had a payment deferral because of COVID-19 of six months, and are still unable to make their repayments because of COVID-19, they will need to contact their lender for ‘tailored support’.

The FCA is also considering the implications of this approach for the consumer credit industry.

UK Finance and the Building Societies Association have published a joint press release following the announcement.

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HM Treasury publishes written answers to questions on mortgages and the impact of COVID-19

It may just be me but one of the things I’ve found interesting are the questions being put to the Government (and their answers) about the response for mortgage and credit customers being impacted by COVID-19.

Earlier today, HM Treasury published three written responses to questions 74750, 74751 and 74752. All of the questions were asked by a Labour MP, Kate Osborne. She asked:

– what recent discussions the Chancellor has had with representatives of the mortgage lending sector on easing the financial pressures faced by people paying “double interest” on their mortgage during covid-19 outbreak and what plans he has to help those people switch to new mortgage lenders;

– what assessment the Chancellor has made of the effect of the modified affordability assessment on the number of mortgage prisoners unable to access new mortgages; and

– what recent discussions the Chancellor has had with representatives of the mortgage lending sector on tackling the situation affecting mortgage prisoners.

All three questions received exactly the same answer:

“The Government remains committed to supporting these borrowers, which is why the Government and the FCA have taken action to remove the regulatory barriers that previously prevented switching.

Lenders are currently making the necessary adjustments and system changes to enable them to use the modified affordability assessment for borrowers looking to re-mortgage. Due to the operational constraints caused by Covid-19 there was a temporary retraction of mortgage products in the market, therefore it would not have been of benefit to contact borrowers when meaningful options were not available to them. We expect lenders to start offering these borrowers switching options by the end of the year.

Earlier this year I wrote to UK Finance outlining my expectation that as many of its members as possible should move quickly to offer new deals to borrowers that are eligible to switch under the new FCA rules. You can read the letter here.

The Government continues to work with the mortgage lending sector to ensure support is available for consumers.

The FCA also recently noted that firms should be reviewing their variable rates to ensure they adhere to regulations regarding the fair treatment of consumers. The full statement can be found here.”

Without wanting to be a pedantic lawyer, these answers do not really respond to the MP’s questions. Perhaps that’s the point. But I think I’ll continue to keep reading these answers as they give a useful insight into the Government’s views, and an insight into the issues being raised by consumers with MPs.

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FCA publishes updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 15 July 2020, the UK Financial Conduct Authority published updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s updated guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a short feedback statement.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA consults on draft updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 3 July 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s draft guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

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FCA publishes updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays

Earlier today, on 1 July 2020, the UK Financial Conduct Authority issued its finalised and updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays.

There’s finalised updated guidance for credit cards (including retail revolving credit), for overdrafts and for personal loans. There’s also a feedback statement and a press release on banks’ overdraft pricing decisions and plans to support consumers.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.