FCA’s consumer credit proposals welcome – but credit rating protections needed beyond October

The Money Advice Trust, the charity that runs National Debtline has welcomed the FCA’s proposed further guidance on consumer credit and overdraft customers impacted by Covid-19, but called for continued credit rating protections for people experiencing temporary financial difficulty beyond October.

Jane Tully, Director of External Affairs at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “The FCA’s Covid-19 measures to date have helped millions of consumer credit customers through this difficult period – and the regulator is right to issue specific guidance to help firms put in place tailored support beyond October.

“With the full economic impact of Covid-19 yet to be felt, the support available to customers cannot go back to normal, when their lives and finances remain anything but.

“We are pleased to see that firms will be expected to offer targeted payment reductions and deferrals for customers facing short-term uncertainty beyond October. We also welcome the FCA’s specific guidance for firms on refinancing existing credit agreements where lower payments can be made over a longer term – this is an important post-Covid forbearance option that should be made more accessible to customers.

“The regulator’s plans could go further, however – in particular, we need to see continued credit rating protections where the outbreak has caused only temporary financial difficulty.”