With the Covid-19 strain of coronavirus continuing to spread, many businesses and companies have had to rethink their policies regarding those who have been affected by the virus.
The Financial Conduct Authority (FCA) issued a statement on 17 March regarding the changes made to its debt rules, in response to the ongoing virus outbreak.
Customers to be ‘given more time’
In the announcement, the FCA said, “In the current climate, we want firms to show greater flexibility to customers in persistent credit card debt.”
The statement went on to explain that, under the current FCA rules, firms are “required to take a series of escalating steps to help customers who are making low repayments over a long period of time”.
Credit card firms were warned by the FCA to help customers in persistent debt, by potentially reducing, waiving or cancelling any interest, fees or charges.
Now, the FCA has stated, “Given the challenges facing many customers at present, we think they should be given more time, until 1 October 2020, to respond to firms’ communications.
“This applies both to those who have already received communications from their provider and those that are yet to receive them.”
The financial regulatory body said it was “encouraged” by the actions of some banks who have granted repayment holidays for mortgage customers experiencing difficulties.
They added that they will be “discussing with the industry and updating approaches mortgage providers may take to assisting their customers in the coming days.”
The regulator also praised firms who have allowed customers to withdraw money from savings accounts that normally incur a penalty for taking cash out early.
”We welcome firms taking initiatives going beyond usual business practices to support their customers," it added.
Support for customers using online banking for the first time
The notice also stated that the FCA are working with the Bank of England and the Payment Services Regulator to understand problems consumers may have accessing cash.
It asked banks to help customers who may be using online banking services for the first time as a result of social distancing and quarantine measures introduced this week.
The government “strongly advised” people aged over 70 to avoid non-essential social contact, use of public transport and gatherings with friends and family. That risks cutting off from access to bank branches the age group most reliant on them.