Coronavirus: Financial Conduct Authority proposes vehicle payment freeze
The Financial Conduct Authority has unveiled proposals for measures to help people keep possession of their vehicles during the economic and social upheaval caused by the COVID-19 epidemic.
With large numbers of people becoming unemployed through no fault of their own due to the epidemic and the responses taken to contain it, difficulty in keeping up with vehicle payments has become a widespread problem.
To help deal with this, the FCA has proposed a three-month payment freeze for “customers who are having temporary difficulties meeting finance or leasing payments due to coronavirus” among other measures.
The FCA went on to recommend that “if customers are experiencing temporary financial difficulties due to coronavirus, firms should not take steps to end the agreement or repossess the vehicle” and noted that “the measures outlined today do not prevent firms from providing more favourable forms of assistance to any customer, including a longer payment freeze if appropriate.”
After a consultation period concluded on Monday 20th April, a final version of the proposals is due to be released on Friday 24th April.
Commenting, interim Chief Executive at the FCA Christopher Woolard said: “We have tailored our measures to specific products. For most of these proposals, firms and consumers should consider the amount of interest which may build up and balance this against the need for immediate temporary support. If a payment freeze isn’t in the customer’s interests, firms should offer an alternative solution, potentially including the waiving of interest and charges or rescheduling the term of the loan.”
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