ii comment: FCA's financial relief for credit consumers hit by Covid-19

Our expert gives his take on the industry regulator's latest financial relief measures.

The Financial Conduct Authority (FCA) has today confirmed a raft of temporary measures to provide financial relief to consumers facing payment difficulties.

The measures include firms being expected to:

• offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by coronavirus.
• allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months.
• make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force.
• ensure consumers using any of these temporary payment freeze measures will not have their credit file affected.

The rule changes come into force from today and the full range of measures will apply by Tuesday 14 April 2020, according to the city watchdog.

Myron Jobson, Personal Finance Campaigner, interactive investor, comments: “The raft of measures announced by the FCA to alleviate the financial burden on people who have taken out loans, use credit cards or other forms of consumer credit products are sensible and welcome. They offer much-needed financial respite to those who have fallen into arrears or have plunged deeper into a financial hole because of loss of income due sudden illness, being furloughed or redundancy as a result of the Covid-19 pandemic.  

“The word ‘unprecedented’ is oft used, but we are truly living in unprecedented times. It would appear that the coronavirus will disrupt the status-quo for the foreseeable future, so it is important for people to pay closer attention to their financial wellbeing and take some time to plan ahead to mitigate the impact of Covid-19 on their bottom line. Consumers should remember that payment holidays will not constitute free money – you’d need to pay it back.”