The rules from the Financial Conduct Authority (FCA) that come into force today (4 November) mean credit and mortgage providers have to provide better support to customers, including more options to postpone a payment.
Lenders now need to provide more money guidance and debt advice to customers who could be struggling to make their repayments.
Customers at risk of payment difficulty will also be better protected, with the same treatment given to those who could potentially miss a payment as to those who have already missed one.
There will also be more consideration of borrowers’ individual circumstances when a payment plan is implemented, which is already required for mortgage holders.
Some requirements include the waiving or cancellation of further interest charges so the level of debt that someone has doesn’t increase. It has also asked firms to develop data models so they can monitor overdraft usage and then provide support or suggestions for how account holders can manage the levels better.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
The changes to the expectations of firms incorporate the regulator’s Covid-19 rules, known as the Tailored Support Guidance, which helped customers who were financially worse off during the pandemic.
Where firms haven’t met the expectations of the FCA, there have been fines totalling nearly £60m for 270,000 affected customers.
The regulations come 18 months after the consultation into protecting people in financial difficulty launched in May 2023, which led to the policy confirmation in April 2024.
In the three years to January 2024, almost three million adults sought help from a lender, debt adviser or other financial support charity because they found themselves in financial difficulty.
The regulator noted that almost half (47%) of those who received help said they were in a better position as a result.
‘Reach out to lender’ if you’re worried
Sheldon Mills, executive director of consumers and competition, said: “Our research shows many people are still struggling with their bills, though it is encouraging to see some benefitting from the help that’s available.
“If you’re worried about keeping up with payments, reach out to your lender straight away. They have a range of support options and will work with you to agree the best one for you. You can also find free debt advice through MoneyHelper.”
