FCA confirms mortgage firms should not enforce repossessions before April
The Financial Conduct Authority (FCA) has confirmed that mortgage firms should not repossessions, except in exceptional circumstances, before 1 April 2021.
The financial watchdog also confirmed that consumer credit firms will be able to repossess goods and vehicles from 31 January 2021.
However, the FCA added that such measures should only be used as as a last resort, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding.
The watchdog said that firms will also need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate.
The FCA said its approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home at this time.
The FCA reiterated that support continues to be available for consumer credit and mortgage customers who are experiencing financial difficulties because of coronavirus. This could mean taking a payment holiday or receiving tailored support.
It reminded consumers that they have until March 31 2021 to apply for a payment holiday for:
- Mortgages, personal loans, credit cards, store cards and catalogue credit, motor finance, including hire-purchase and leasing agreements, rent-to-own, buy now pay later, pawnbroking agreements and high-cost short-term credit.
The FCA said that if you are coming to the end of your payment holiday, and you are still experiencing difficulties in keeping up with you repayments, your lender should provide tailored support. This is support appropriate to your individual circumstances.