The complaints regulator outlined the key ways that lenders should be acting and things they need to consider when faced with borrowers in financial difficulties.
“When looking at a complaint, we’d expect to see that a lender responded positively and sympathetically to a borrower being in financial difficulties,” the FOS said.
It also highlighted that borrowers may not be able to sufficiently explain their issues and that lenders should “proactively look for signs of financial difficulty”.
Lenders should be thinking about and taking into account:
- Individual circumstances, to decide what is fair and reasonable in the circumstances of the complaint.
- The FCA’s most recent guidance for people having difficulty paying their mortgage during this particular time. In particular considering additional forbearance measures such as longer payment holidays, repayment plans, freezing interest, reasonable arrears rescheduling and pausing on repossessions/court action.
- That there is no need for lenders to investigate further in order to agree to the payment holiday, and customers already in a payment arrangement shouldn’t be treated less favourably.
- Any payment holiday should not be recorded on or have an impact on the customer’s credit file.
- That they should carefully listen to consumers and proactively look for signs of financial difficulties. Consumers may not always know the best way to express their concerns.
- Even if a customer doesn’t specifically ask for a payment holiday when calling to discuss difficulty in making their payments, it should be offered.
- Where possible, make it easy for your customers to contact you – including, where appropriate, by different channels to those you usually make available.
Extraordinary effort required
“In a few short months, Covid-19’s impact has been felt by every one of us,” the FOS noted on its monthly bulletin.
“This extraordinary situation requires an extraordinary effort to support the tens of millions of customers who’ve been affected by the crisis.
“Though the future’s far from certain, the businesses we cover, having supported lives and livelihoods in more normal and optimistic times, now have a key part to play in mitigating Covid-19’s worst effects.”