FCA plans financial relief for customers amid COVID-19 pandemic
UK regulator the Financial Conduct Authority (FCA) has proposed a series of new measures in reaction to the impact that the coronavirus is having on households, among them a three-month freeze on loan and credit card debt.
The new proposals will sit alongside relief offered by the government for mortgage holders, furloughed staff, and the self-employed.
A consultation will occur on the proposal, but the watchdog has said that due to the “national emergency” and the “significant impact on consumers’ finances” occurring, the response window will be dramatically shortened.
Among the new proposals are rules on overdrafts, credit cards, personal loans and the treatment of interest.
Consumers who need additional financial support because of coronavirus with an existing arranged overdraft will be able to request from their provider that up to £500, on their main personal current account, is provided at 0% for up to three months.
Those in financial trouble will also be able to ask for a three-month payment freeze or to pay a nominal payment on credit cards, store cards and catalogue credit.
Customers with personal loans who face difficulties with their finances as a result of coronavirus would also be able to ask for a three-month freeze if needed.
If confirmed the measures would come into place on 9 April.
“Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK,” says Christopher Woolard, interim chief executive of the FCA.
“If confirmed, this package of measures we are proposing will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time.”