The FCA has today proposed
extending relief measures for motor finance, buy now pay later, rent to own, pawnbroking
and HCSTC customers. The move follows the introduction of extended
protections for mortgage, personal loan, credit card and overdraft customers.
The window to request new
payment freezes will be extended to October, in line with other forms of
credit. At the end of a first payment freeze, firms will be required to
contact customers to find out if they can resume repayments.
While further payment
deferrals will be available where needed for motor finance, rent-to-own and
pawnbroking, however, HCSTC customers already on a payment freeze will not have
the right to have this extended. HCSTC customers had already been offered
a lower level of protection, with a one month freeze instead of the three
months applied to other borrowing.
Joanna
Elson OBE, chief executive of the Money Advice Trust, the charity that runs National
Debtline and Business
Debtline,
said:
“The
FCA was quick to act at the start of the Covid-19 outbreak, and has made the
right call in extending its temporary relief measures for customers with
mortgages, personal loans, credit cards and now other forms of consumer credit
too.
“However,
high cost short term credit customers have again received a lower level of
protection than people with other forms of borrowing – they can only access a
one month payment deferral, rather than three months, and today’s measures do
not include any requirement for high cost short term credit firms to extend
this deferral where needed.”
“Now
that the FCA has extended its relief measures, the next major crunch point for
households will come at the end of August, when the government’s bans on
evictions and bailiff visits come to an end. The government must
take steps to protect renters beyond August, and urgently reform the way
council tax is collected before bailiff visits are allowed to resume.”