The Money Advice Trust has responded to the Financial Conduct Authority’s (FCA) letter to credit card firms that reviews their approach to borrowers stuck in persistent.
The letter outlines a number of concerns and areas firms need to review to ensure their communication and interventions with customers in persistent credit card debt at the 36 month point meets the expectations of the regulator.
Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “These new rules from the FCA are ultimately designed to help people struggling with persistent credit card debt, and the regulator is right to have an eye on unintended consequences. It is crucial that credit card firms get this right – including by offering sustainable repayment options and forbearance where necessary. A ‘blanket’ suspension of credit cards risks inadvertently making the financial situations of some customers worse, and the regulator is right to warn firms against this approach.
“We welcome the FCA’s reminder of the role of free debt advice in this complicated process, as many customers will be receiving letters from multiple credit card providers and may have other debts too.
“It is crucial that anyone receiving these letters engages with their credit card provider as soon as possible, and that firms signpost their customers to receive free, independent debt advice on the whole of their debt situation where necessary.”