The Analysis Comment
Taking on the customer’s rights to be protected
The regulator has extended relief measures, but high cost short term credit customers remain less protected
Joanna Elson Chief executive, the Money Advice Trust
Last month, we welcomed the Financial Conduct Authority’s
(FCA) proposed
extension of temporary relief measures for motor finance and high cost credit customers – but warned high cost short term credit (HCSTC) customers remain less protected.
Relief The FCA has 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.
Further deferrals 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
firms will be required to contact customers to find out if they can resume repayments
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
month freeze instead of the three months applied to other borrowing.
Quick to act 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, HCSTC 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 these measures do not include any requirement for HCSTC firms to extend this deferral where needed.
freeze,
Extended 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. CCR
August 2020
www.CCRMagazine.com
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