FCA has previously required firms to offer payment holidays if they received information suggesting the customer might experience payment difficulties. Now it has clarified that firms can choose to make necessary enquiries and should give customers adequate information for them to understand the implications of taking a payment holiday. It reminds firms that the affordability assessment requirement does not apply to forbearance or payment holidays, but says firms should ensure the ultimate recovery of sums is in line with Principle 6 and TCF. Where a firm s already taking steps under MCOB 13 it will need to consider whether further complementary measures are appropriate. Finally, FCA stresses no customer who receives a payment holiday in these circumstances should be regarded as having any form of detrimental arrears and there should be no negative impact on their credit file.
FCA’s guidance also notes that if the rights under a mortgage contract have been assigned to an unauthorised person, that person must comply with general consumer protection law, such that even a person not regulated under FSMA could be at risk of not complying with the Consumer Protection from Unfair Trading Regulations 2008 if it does not comply with FCA’s guidance.
FCA will review its guidance within the next 3 months.