The FCA has announced proposals which would provide continued support for users of motor finance and high cost credit products, who continue to face payment difficulties due to coronavirus (Covid-19).
The proposals outline the options firms will provide motor finance customers who are coming to the end of a payment freeze, as well as those who are yet to request one. The FCA proposals include:
- At the end of a first payment freeze, firms should contact their customers to find out if they can resume payments - and if so, agree a plan on how the missed payments could be repaid. If customers can afford to return to making regular repayments it is in their best interest to do so.
- Anyone who continues to need help gets help - for customers still facing temporary payment difficulties as a result of coronavirus, firms should provide them with support by freezing or reducing payments to a level they can afford
- Extending the time the scheme is available to people who may be impacted at a later date – customers that have not yet had a payment freeze, would be able to request one up until 31 October 2020.
- The ban on repossessions should continue until 31 October 2020 – this applies to motor finance customers still facing temporary payment difficulties as a result of coronavirus and who need their vehicles or goods.
When implementing this guidance, “firms should be particularly aware of the needs of their vulnerable customers and should consider how they engage with them”, said FCA.
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