As the deadline to apply for a payment deferral ends on 31 March
2021, the FCA wants to reassure consumers in financial difficulty
that support will continue to be available under the Tailored
Support Guidance (TSG).
Payment deferrals allowed firms to deal with unprecedented demand
for short-term support very quickly. As the crisis evolves and
demand for payments deferrals reduces, tailored support provides
a longer-term framework for firms to offer a wider range of
options which are tailored to a consumer’s individual needs and
circumstances.
The FCA has published finalised
guidance for firms, to ensure that mortgage customers whose
homes may be repossessed are treated fairly and appropriately,
particularly where there are risks of harm to customers who are
vulnerable, including as a result of coronavirus.
This means that firms considering or taking repossession action
should only do so as a last resort and when all other reasonable
attempts to resolve the situation have failed. Firms should also
take additional care when taking action to enforce repossession
if their customer would be at greater risk of harm from
coronavirus if made to vacate the property. This will provide
protection for customers when government restrictions, which
prevent firms from enforcing repossession in certain parts of the
UK, end - or where they do not apply.
Sheldon Mills, Executive Director, Consumers and Competition at
the FCA, said: ‘As we move into the next phase of the pandemic,
we want to reassure consumers that they will continue to receive
fair and appropriate support. We encourage those in difficulty to
contact their lender to discuss their options.
‘We’ve been monitoring how firms are providing support and found
they have responded well to the challenge of providing tailored
support, but there is more to do. We’ve set out where firms need
to improve in a report on how they are implementing tailored
support.’
The report, which focuses on
firm’s capabilities to support consumers financially impacted by
coronavirus, found that firms have progressed well in
implementing the TSG and have acted quickly to build their
capacity. However, it also highlights some areas for improvement,
which firms are expected to address. The FCA will continue to
monitor firms over the coming months.
The findings in the report, include:
- Consumers have generally been able to get support as they
come to the end of a payment deferral. The FCA has not identified
any systemic issues with firms' ability to meet the demand from
customers seeking further help. The support identified in the
report has typically been short term in nature given the
uncertainty of customers’ financial circumstances during the
pandemic.
- All firms assessed had vulnerable customer policies in place,
and it was noted that 94% of mortgage firms and 64% of credit
firms had reviewed or added to them in light of the pandemic.
Firms are encouraged to review the recently published guidance on vulnerable
consumers and to embed relevant aspects into their processes to
ensure that vulnerable customers are treated fairly.
- Due to the pandemic, some firms anticipated an increase in
demand from customers in financial difficulty and recruited more
staff to address that demand. As a result, there has been a
significant increase in inexperienced staff helping customers,
which may lead to an increased risk of harm. Firms are expected
to ensure that all staff are adequately trained and have
appropriate oversight of new staff to ensure that the right
support is provided to customers.
- Some firms have accelerated plans to automate aspects of the
customer support journey. The FCA found that in general these
automated approaches were easy to navigate with minimal steps and
helpful menus for customers to select from. However, some firms
could make some improvements, particularly around the ease of
access to non-digital support.
In September 2020, the FCA published TSG covering mortgages and
consumer credit, as well as additional overdrafts guidance. The
FCA committed to review the credit TSG after 6 months, which was
extended to include mortgages and overdrafts. The FCA has
concluded that these pieces of guidance will continue to be
relevant over the coming months, especially as the Payment
Deferral Guidance comes to an end. The FCA will keep these pieces
of guidance under review and will make changes if necessary.
Notes to editors
