The Financial Conduct Authority today said it planned to make finance companies give further breathing space to hard-up customers struggling as a result of the Covid-19 crisis.
FCA watchdogs said firms were now expected to offer a three-month payment freeze on motor finance before taking steps to end the agreement or repossess the vehicle. Payday loan companies were told to provide one month’s interest-free payment freezes.
Those offering pawnbroking-style loans were also expected to offer three months of breathing space.
The FCA said the timescale for payday lenders was narrower because of the relatively short nature of such loans.
Which? welcomed the proposals as a “positive step”. They come on top of previous FCA measures to protect consumers in hardship.
FCA interim chief executive Christopher Woolard said: "We are very aware of the continued struggle people are facing as a result of the pandemic.
"These measures build on the intervention we announced last week, and will provide much needed relief to consumers during these difficult times."
