FCA tells lenders to support customers with the cost of living

FCA has written to over 3,500 lenders to remind them of the standards they should meet as consumers across the country are affected by the rising cost of living. Firms are expected to understand the changing pressures on customers and target their efforts in response.

FCA has reiterated the importance of treating borrowers fairly and has set out its expectations of firms which include:

  1. providing customers with an appropriate level of care and support;
  2. giving borrowers who are in financial difficulty, an appropriately tailored forbearance which is in their interests and takes account of their individual circumstances;
  3. supporting borrowers showing signs of financial difficulty or struggling with debt, by informing them of and helping them to access money guidance and free debt advice;
  4. ensuring fees and charges to borrowers are fair and not in excess of lenders’ costs;
  5. approaching new borrowers in a manner that accounts for financial pressure they may be facing and the impact on their expenditure;
  6. identifying specific needs and circumstances of customers with vulnerable characteristics and providing help and support on account of these;
  7. encouraging borrowers to think about switching to less costly options (where available); and
  8. helping customers avoid falling victim to scams or illegal money lending.

In particular, FCA found, in its review, that firms did not consistently comply with 1, 2 and 6.

FCA will continue to monitor outcomes and use their supervisory and enforcement powers as necessary.

Harshil Patel