In Focus Collections
After this time, companies will need to contact customers, in order to prompt them to change their repayment. And they will be required to inform them that their card may, ultimately, be suspended if they do not take action to change their repayment pattern
Escalating steps Under these new rules, firms will be required to take a series of escalating steps to help customers who are making low repayments
April 2018
over a long period, beginning when the customer has been in persistent debt for over 18 months. After this time, companies will need to
contact customers, in order to prompt them to change their repayment. And they will be required to inform them that their card may, ultimately, be suspended if they do not take action to change their repayment pattern. The FCA has been clear, of course, that
credit-card providers can take additional and quicker steps than those specified here. Once a consumer has been in persistent
debt for 36 months, their provider will have to offer them a way to repay their balance in a reasonable period. If they are unable to repay, the firm must
show the customer forbearance. This may include reducing, waiving, or cancelling any interest, fees, or charges.
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Need for evidence A key required outcome going forward will be ensuring lenders – or servicers like ourselves – can evidence their compliance with the new requirements, by taking the additional steps with customers experiencing longer-term payment issues. However, original proposals to include
credit-card products, which are primarily for business use, have been removed, following responses to an earlier consultation. The FCA also considered whether rules
on the allocation of payments needed to be modified, but decided that no change was necessary. We are looking forward to working with
our clients to meet the demands these new requirements will bring. Like our reputable, mainstream clients, we welcome measures which will increase customer engagement and trust. CCR
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