Financial regulator expresses concern that some customers are not getting the necessary support
As consumers across the country are affected by the rising cost-of-living, the Financial Conduct Authority (FCA) has reminded more than 3,500 lenders to make sure that borrowers struggling with payments and customers in vulnerable circumstances can access the help they need.
After looking at how borrowers in financial difficulty are being treated by lenders, the regulator has determined that most firms need to have better conversations to fully understand their customers’ individual circumstances, so they can provide appropriate tailored support and ensure that arrangements to pay back debt are sustainable.
“Many consumers are feeling the impact of the rising cost-of-living in their personal finances, and we expect this to increase over the next few months. Early action is important for those struggling with debt,” Sheldon Mills, executive director of consumers and competition at the FCA, said.
The FCA said it is concerned that some customers in vulnerable circumstances are not getting the support they need, noting that some lenders are not discussing the potential benefits of money guidance, free debt advice, or helping and supporting borrowers to access them.
These concerns were seen broadly across the sector, and more serious failings were found at more than 30 firms, largely in the consumer credit sector.
In a letter sent to the lenders, the FCA reminded them that struggling borrowers must be given support that is tailored to their specific circumstances.
Read more: As government schemes are withdrawn, borrowers will need more support than ever.
The financial regulatory body also told the lenders to only charge fees which are fair and that cover the firm’s costs.
“We need all firms to get the basics right and provide good quality support. Where we see more serious wrongdoing, we are already acting to ensure these firms improve,” Mills said.
“The financial services industry has a significant role in helping consumers manage their finances – and it should expect us to pay close attention to how they do that over the next few months.”
The FCA also advised people who are struggling to manage their finances to speak to their lenders for support as early as they can. It added that they can also get free support and advice, for example, through the MoneyHelper service.
