FCA takes action on redress for borrowers

FCA has updated on its work with nearly 100 lenders on how they treat borrowers in financial difficulties. It identified a number of failings, including failure to tailor support to the circumstances of relevant individuals, failing to respond appropriately to customers with characteristics of vulnerability and not engaging effectively with customers about money guidance and debt advice.

To date, FCA has secured up to £47m redress from 17 firms, to the benefit of over 195,000 customers, and has given feedback to all firms.

It is now consulting on improvements that would make permanent the requirements it imposed on lenders during the pandemic, to ensure better help for borrowers.  It is also taking the opportunity to make some targeted additional changes and to clarify some of its expectations.  The consultation affects consumer credit and mortgage lenders, mortgage administrators, premium finance firms, home purchase providers and administrators, firms that carry on activities related to consumer hire, operating lending P2P platforms or debt collecting. It also applies to consumer credit and mortgage lenders in supervised run-off post Brexit, and to relevant passporting in Gibraltar firms.  Consultation closes on 13 July, and FCA expects to bring the new rules into force next year, at which point it will withdraw the tailored support guidance.


Emma Radmore