Coronavirus: Freezing Payments to Help Customers Credit Car Financing and Payday Loans | Economic news

The city watchdog has announced assistance to households struggling to meet payments from a range of credit products, including auto financing and payday loans.

The Financial Conduct Authority (FCA) has said it is moving forward with plans that will allow financially distressed customers due to the COVID-19 crisis to request a payment freeze from Monday.

The temporary measure covers auto financing, buy it now, pay later, lease with an option to buy and pawn shop agreements for up to three months.

High-cost short-term credit – including payday loans – is only covered for one month, but the FCA said no additional interest could be charged by the provider if the borrower takes the time off. payment.

The regulator urged companies to be fair in their approach, but said some have already gone above and beyond their obligations to help struggling customers.

Auto finance and leasing operators have been warned that they should not take steps to repossess vehicles if the customer needed them during the crisis.

Christopher Woolard, FCA Acting Managing Director, said: “We have been working quickly to introduce temporary financial relief tailored to a range of specific credit products.

“Many companies are already working with their customers, but these measures ensure that all consumers affected by the coronavirus emergency can request a temporary freeze on their payments.”

The industry had not yet given a response to the measures.