The regulator expects creditors to exercise leniency to those who are struggling financially.
The Financial Conduct Authority (FCA) has today announced its finalised guidance on repossessions for mortgages and consumer credit amid the coronavirus pandemic, as well as its intention to consult on an increase in the limit for contactless payments.
- For consumer credit, the FCA have updated the guidance so that firms will be able to repossess goods and vehicles from 31 January 2021 – but only as a last resort.
- For mortgages, the FCA is extending the guidance so that firms should not enforce repossessions, except in exceptional circumstances, before 1 April 2021.
- The FCA will be seeking views on amending its rules to allow for a possible increase in the contactless limit to £100.
Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The Covid-19 financial support measures were only meant to be temporary, but many Britons remain on the edge of the financial precipice because of the pandemic. The worry is these individuals will be tipped over the edge once the ban on the repossession of goods and vehicles expires at the end of January.
“While the regulator emphasises that this should only be as a last resort, interpretations of this may vary. It creates additional uncertainty and worry for the most vulnerable - and at the most difficult of times.
“In light of the fast-approaching deadline, those struggling to meet repayment obligations should act swiftly and contact their creditors for more support. The FCA expects creditors to exercise leniency to those who are struggling financially, and to act in accordance with the customer’s best interests.
“For mortgage customers, the FCA has clearly factored in the difficulties they would face if forced to move amid the current lockdown restrictions, because of their home being repossessed.”
Possible increase in the contactless limit to £100
Myron Jobson says: “The Covid-19 pandemic has accelerated the move towards a cashless society by many years.
“The convenience factor of contactless payments is undeniable, and the increase in the contactless limit from £30 to £45 less than a year ago has had a role in stopping the spread of the dastardly coronavirus.
“However, upping the limit to £100 might be a step too far as it increases the risk of investment fraud. It could worsen the problem of pickpockets or malicious individuals using lost bank cards to make as many transactions as possible before the account is blocked.
“While banks have security systems in place to detect fraudulent contactless transactions and victims of contactless fraud may be able to recover the loss capital, it may take some time to do so – time that many Britons struggling to make ends meet during the pandemic might not have.”
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