The consumers who are in stress due to the coronavirus or COVID-19 pandemic are going to have more time to ask for a temporary freeze on their credit card payments, the Financial Conduct Authority of Britain stated on Wednesday.
The measures got introduced in April for offering temporary relief to the customers with credit cards and interest-free bank overdrafts were going to get over in this month. The FCA mentioned that the customers yet to request a payment freeze or an arranged interest-free overdraft of up to 500 pounds, are going to have time till October 31 to apply.
UK Credit Card Consumers to Have More Time for Temporary Freeze
"For those who are now in a position to restart payments, it will be in their best interests to do so. But for those who still need it, the package we are confirming today ensures there is help and further support," said Christopher Woolard, the FCA's interim chief executive.
Firms should contact customers coming to the end of a first payment freeze to find out if they can resume payments - and if so, agree on a plan on how the missed payments could be repaid, the watchdog said. The FCA also said on Wednesday that temporary curbs on how banks charge for overdrafts during the pandemic would not be extended.
"Firms that do choose to increase their charges from this temporary level should give customers impacted by coronavirus an opportunity to seek extra support before any changes take effect," the FCA said. Wednesday's statement does not apply to other forms of consumer credit including motor finance, payday loans, pawnbroking, rent-to-own, and buy-now-pay-later products whose COVID-19 related measures will be updated soon, the FCA said.
(With agency inputs)