The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has welcomed the Financial Conduct Authority’s 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.
The FCA has today 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.
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 month freeze instead of the three months applied to other borrowing.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “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, high cost short term credit 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 today’s measures do not include any requirement for high cost short term credit firms to extend this deferral where needed.
“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.”