UK FCA urges lenders to do more to help borrowers amid cost of living crisis

Signage of Britain’s Financial Conduct Authority (FCA) regulator is seen at its headquarters in London, Britain March 10, 2022. REUTERS/Toby Melville

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LONDON, June 16 (Reuters) – Britain’s Financial Conduct Authority (FCA) said on Thursday it was writing to more than 3,500 lenders demanding increased support for consumers struggling with the soaring cost of living, after discovering of “serious defaults” at more than 30 lenders. suppliers.

The watchdog, which is tasked with overseeing the activities of big banks as well as smaller lenders, expressed concern that some vulnerable customers were not getting the advice or guidance they needed to meet the challenges. management of their finances, in a context of high inflation and energy insecurity.

“Many consumers are feeling the impact of the rising cost of living on their personal finances and we expect this to increase over the coming months. It is important to act quickly for those struggling with debts,” Sheldon Mills, FCA’s executive director of consumer and competition, said.

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The regulator said it wanted to remind banks to provide support to distressed borrowers tailored to their specific circumstances and only charge fair, cost-covering fees.

Although it said it found evidence that banks and lenders offered adequate standards of support, serious failures were found in 34 companies, operating mainly in the consumer credit sector, the FCA said, adding that she expects these companies to improve the way customers are treated.

Although not all Buy Now, Pay Later (BNPL) products are currently regulated, the letter was also sent to BNPL suppliers to encourage good standards of customer service and support.

The FCA said its review of the industry included four surveys of more than 400 lenders, consumer research and more detailed assessments of a sample of 63 companies.

He said he would monitor results and scrutinize companies, and use oversight and enforcement powers to take further action if necessary.

“The financial services industry has an important role to play in helping consumers manage their finances – and they should expect us to pay close attention to how they do so over the coming months,” said said Mills.

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Reporting by Sinead Cruise, editing by Karin Strohecker

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