The Financial Conduct Authority has implemented temporary measures to offer support to consumers impacted by COVID-19.

The FCA’s approach is summarised on an updated webpage, which explains that the measures are intended to complement the government’s steps to support mortgage holders (and renters) and the assistance being provided for furloughed employees and the self-employed.

The measures are as follows:

Temporary finalised guidance for firms on overdrafts. This relates to overdrafts on a customer’s “primary personal current account”.  Where a customer in financial difficulty has an arranged overdraft, the FCA guidance proposes that for a period of three months:

• No interest should be payable on up to £500 of the balance of the overdraft;

• If the overdraft has a limit of more than £500, interest should not be charged on the first £500; and

• If the limit is up to £500, no interest should be charged.

Temporary finalised guidance for firms on credit cards. Any consumer having problems should contact their credit card lender and ask for a deferral.  Subject to the lender being satisfied that the request is genuine, the lender should defer payment for three months. A shorter period can, however, be agreed. Please note that the debt is deferred, not written off. The deferral should not appear on the consumer’s credit history.

Temporary finalised guidance for firms on personal loans. The FCA’s guidance is broadly the same as for credit cards.

The guidance supports the FCA’s consumer protection objective and is designed to protect consumers by providing them with temporary support in the light of the current exceptional circumstances arising out of COVID-19. In each case, the guidance builds on Principle 6 (commonly known as the “Treat Customers Fairly Principle”) of the FCA’s Principles for Businesses.

The guidance applied from yesterday.

The FCA intends to keep the guidance under review in the light of the evolving COVID-19 situation. It will bring forward further measures if necessary.

Read all of our articles relating to COVID-19 here.