Users of car finance products and high cost credit services who’ve been impacted by coronavirus are set for an extension to protections introduced by the Financial Conduct Authority (FCA).
The regulator has published a set of proposals that it intends to help give borrowers a better chance of dealing with their debts even if they’ve been badly hit financially by the pandemic and lockdown situations.
Earlier in the year, consumers were given the option of claiming a payment freeze on their car finance deals or their high cost credit facilities.
That option is now set to remain available until the end of October to users of car finance, buy-now-pay-later deals, rent-to-own packages or pawnbrokers.
Anyone who has not yet requested a payment freeze on their debts but feels they need one can make that application any time between now and October 31st 2020.
Meanwhile, debtors who reach the end of their payment freeze periods but still find themselves struggling financially should be able to explain that to their creditors and reach an agreement that sees them paying back only what they can afford.
Lenders are being encouraged to provide support to anyone who continues to experience difficulties in making payments after their payment freeze period has ended.
Repossessions will also be banned until the end of October in relation to cars or other products connected to the terms of high cost lending deals.
Companies who provide high cost credit are being told that they need to pay particular attention to the needs of people who are in vulnerable situations as a consequence of their debts or their financial difficulties.
“It is vital that people facing temporary payment difficulties because of the impact of coronavirus get the assistance they need,” said Christopher Woolard, interim chief executive at the FCA.
“For those who have already taken a payment freeze and can afford to start making payments, even partially, it is in their best interest to do so, but for those that need help it will be there.”
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