The Financial Conduct Authority (FCA) is suggesting that a temporary payment freeze be applied on loans and credit cards for up to three months to ensure customers who are facing extra financial pressure due to coronavirus don't get shafted.
The package will sit alongside those already rolled out, like deferred mortgage payments, and could be enacted as soon as April 9. Sweeping changes like this usually take a while to approve, but as the FCA points out, "given the national emergency and the significant impact on consumers' finances right now," it's pushing to get this cleared in a much shorter timeframe. Here's what it's proposing for borrowers who are floating down shit creek without a paddle right now:
- A temporary payment freeze on loans and credit cards for up to three months
- Zero interest on arranged overdrafts of up to £500 for up to three months
- Customers using these temporary measures should not have their credit rating affected
In light of the recently overhauled overdraft charges announce by the FCA earlier this year, that saw some customers paying more than they previously were, the FCA added, "over the next 90 days, firms would have to ensure all consumers are no worse off and not paying more than they would have paid under previous prices." Christopher Woolard, Interim Chief Executive of the FCA, said:
"Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK. If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time."
None of this is confirmed right now, and your bank needs time to sort its shit out, so don't just stop repayments willy nilly. If find you are struggling, reach out to them as soon as possible to let them know and organised the appropriate assistance.
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