Information for firms on credit cards (including store cards and catalogue credit), personal loans, overdrafts, motor finance and high cost credit agreements.
Information on this page was last updated in 2021.
On 25 March 2021, we published an assessment[1] of firms’ support for consumers financially impacted by coronavirus and a statement[2] of ongoing relevance of Tailored Support Guidance.
We have updated our guidance for firms[3] on the approach to repossessions from 31 January 2021. Consumer credit firms will be able to repossess goods and vehicles from 31 January 2021.
However, this should only be as a last resort, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding.
Importantly, we expect firms to exercise particular care when dealing with vulnerable customers and carefully consider the potential impacts when deciding whether repossession of goods or vehicles is appropriate.
Previous guidance
On 19 November, we confirmed updated support[4] to help people facing payment difficulties due to coronavirus. This includes support for those who are newly affected, and those who have already benefitted from support under the guidance.
These measures cover some of the most commonly used consumer credit products, including; personal loans, credit cards, motor finance, high-cost short-term credit and buy-now pay-later, rent-to-own and pawnbroking.
The measures don't cover overdrafts, which will continue to be covered by the September guidance[5].
On 30 September 2020, we confirmed the next steps of support for consumers with overdrafts [5]and consumer credit products[6]. This includes what support may be needed for consumers who have already made use of our temporary guidance but are still in financial difficulty.
On 15 July 2020, we confirmed further measures[7] to support users of other consumer credit products facing payment difficulties due to coronavirus. These measures covered motor finance and high cost credit agreements including high-cost short-term credit, buy-now-pay-later, rent-to-own and pawnbroking:
- Motor finance agreements and coronavirus: updated temporary guidance for firms [8]
- High-cost short-term credit agreements and coronavirus: updated temporary guidance for firms[9]
- Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus: updated temporary guidance for firms[10]
- FS20/11: Further support for consumers impacted by coronavirus: feedback on draft guidance and rules (motor finance, high-cost short-term credit, rent-to-own, buy-now pay-later and pawnbroking)[11]
On 1 July 2020, we confirmed further support[12] to help people facing payment difficulties due to coronavirus with some of the most commonly used consumer credit products. These measures cover credit cards (including store cards and catalogue credit), personal loans and overdrafts. For the users of these consumer credit products we've published updated guidance:
- Credit cards (including retail revolving credit) and coronavirus: updated temporary guidance for firms[13]
- Personal loans and coronavirus: updated temporary guidance for firms[14]
- Overdrafts and coronavirus: updated temporary guidance for firms[15]
- FS20/9: Further support for consumers impacted by coronavirus: feedback on draft guidance and rules (personal loans, credit cards and overdrafts)[16]
On 24 April 2020, we first confirmed a package of measures[17] to support consumers using these consumer credit products:
- Motor finance agreements and coronavirus: temporary guidance for firms[18]
- Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus: temporary guidance for firms[19]
- High-cost short-term credit and coronavirus: temporary guidance for firms[20]
- FS20/4: Temporary financial relief for consumers impacted by coronavirus: feedback on draft guidance and rules (motor finance and high cost credit)[21]
On 9 April 2020 we first confirmed a package of temporary measures[22] to help users of these consumer credit products:
- Credit cards (including retail revolving credit) and coronavirus: temporary guidance for firms[23]
- Personal loans and coronavirus: temporary guidance for firms[24]
- Overdrafts and coronavirus: temporary guidance for firms[25]
- FS20/3: Temporary financial relief for consumers impacted by coronavirus: feedback on draft guidance and rules[26]
Unsecured debt products – persistent credit card debt
Under our rules, firms are required to take a series of escalating steps to help customers who are making low credit card repayments over a long period. After 36 months of a customer being in persistent debt (PD36) the firm must offer the customer options to help repay the debt more quickly. If customers do not respond to the PD36 communication within a reasonable period set by the firm, the card must be suspended.
In March 2020, we updated our website setting out an expectation (in light of the effect of coronavirus on customers) that firms should show greater flexibility to customers who had been in persistent credit card debt for 36 months.
We said that credit card firms should give these customers until 1 October 2020 to respond to firms’ PD36 communications. This meant that firms were not required to suspend the cards of non-responders before then. This expectation applied both to those who had already received communications from their provider and those that were yet to receive them.
For those customers who are yet to receive a PD36 communication, firms can now decide what is a reasonable period of time to give these customers to respond to a PD36 communication. This should not be earlier than 1 October.
Payment deferrals and PD36 communications
For those customers granted a payment deferral under our credit cards and coronavirus temporary guidance for firms[27] which we first published in April and updated in July, firms should take account of the disapplication of the persistent debt rules to customers granted a payment deferral, for the duration of any payment deferral granted.
When the provisions start to apply again after the payment deferral period, as we set out in the guidance, firms should take account of the duration of any payment deferral when considering what is a reasonable period within which the customer should be requested to respond to the PD36 communication.
