Credit Card Firms told to Do More for Customers in Problem Debt

March 7, 2019

Credit card companies have been told by the Financial Conduct Authority (FCA) that they need to do more to protect and support customers who are clearly facing problems in dealing with their debts.

The FCA has said that credit card lenders are often continuing to apply fees and issue charges against people who repeatedly miss repayments and should be considered to be in need of support.

Another issue highlighted by the FCA is that credit card companies often routinely charge customers multiple fees in a single billing cycle, which can then lead to people being hit with returned payment fees and over-limit fees.

All of which can quickly lead to people who are already struggling with debt to finding themselves in increasingly difficult and stressful circumstances.

The FCA has written to credit card companies to highlight these issues and told them to work on being more responsive to signs that specific individuals could be in serious financial difficulty.

“It is unacceptable for firms to ignore signs of customers struggling financially and continue to charge them fees for missed payments which they likely can’t afford,” said Jonathan Davidson, the FCA’s executive director of supervision, retail and authorisations.

The FCA has said that its efforts aimed at encouraging lenders to stop charging customers who clearly have problem debts have so far resulted in around £80 million being saved by credit card users across the UK.

Service providers in these contexts are being asked to continue to develop their approach when it comes to taking action in support of customers who are showing signs of possible or actual financial difficulty.

Peter Tutton from the debt help charity StepChange has said that the FCA should not hesitate to take action against credit card companies that don’t improve the way they engage with customers with problem debts.

“Early warning signs such as regularly incurring fees and charges should be a wake-up call to the possibility of financial distress,” he said.

“We hope that card providers will renew their efforts to spot early signs of financial difficulty, and if firms don’t address this the regulator shouldn’t be reticent about taking further action.”

If you live anywhere in Scotland and you are struggling to cope with your personal debts then Scotland Debt Solutions can help. Contact us directly to arrange a FREE and confidential consultation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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