Lenders are set to pay out a staggering £47m in redress to borrowers facing financial difficulties, following the intervention of the Financial Conduct Authority (FCA).
As a result of the FCA’s intervention, 17 firms have agreed to provide up to £47m in redress to over 195,000 customers. The FCA has provided detailed feedback to all participating firms, outlining the areas in which they need to enhance their practices.
In addition to the redress measures, the FCA is proposing to make permanent requirements for lenders to support borrowers in financial distress, which were initially introduced during the pandemic.
These rules and guidance apply to mortgage, consumer credit, and overdraft providers and include provisions such as providing appropriate support tailored to individual circumstances, offering reduced or deferred payments, and directing customers to free and impartial money guidance and debt advice.
Sheldon Mills, executive director of consumers and competition at the FCA, highlighted the importance of continued support for borrowers, stating: “Many firms have been following our temporary guidance, developed during the pandemic, to support borrowers in tough times.
“Our proposals today will help ensure this continues. Where we see firms not providing the right support, we will act quickly to put this right.
“Firms are already paying up to £47m in compensation for not providing appropriate support to borrowers. If you’re worried about keeping up with payments, we encourage you to talk to your lender as soon as possible.”
