Tag: COVID-19

Posted on

FCA announces further proposals to support motor finance customers impacted by COVID-19

Earlier today, on 4 November 2020, the UK Financial Conduct Authority published a press release setting out its further proposals to support motor finance customers impacted by COVID-19.

There is:

– a draft updated guidance for consumer credit firms;

– a draft further updated temporary guidance for personal loans;

– a draft further updated temporary guidance for motor finance; and

– a draft Consumer Credit Instrument updating provisions in CONC 6.7 and 7.3.

The FCA proposes:

– those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total;

– those who have had one payment deferral, will be eligible for another payment deferral of up to three months;

– to allow customers until 31 January 2021 to ask for a payment deferral;

– if a customer has restarted payments after a deferral, they are not entitled to another deferral but should receive tailored support if they are experiencing payment difficulties.

– if customers can afford to make repayments then they should continue to do so;

– borrowers should hold off contacting their lender until the enhanced measures are in place;

– lenders should hold off repossessions of goods, unless there are exceptional circumstances, until 31 January 2021; and

The FCA has invited comments by 10am on 6 November 2020.

Posted on

FCA to announce further support for consumer credit borrowers impacted by COVID-19

On 2 November 2020, and following the Prime Minister’s announcement of a further month-long lockdown for England, the UK Financial Conduct Authority issued a press release saying it will announce further support for consumer credit customers impacted by COVID-19.

It seems likely that:

– If a borrower has not yet had deferral already because they are unable to make their repayments because of COVID-19, they will be entitled to ask for a deferral. This could last (depending on the product) for up to six months.

– If a borrower (other than one under a high-cost short-term credit agreement) has already had a payment deferral because of COVID-19, they will be entitled to ask for another deferral.

– If a borrower has already had already benefitted from payment deferrals, and are still unable to make their repayments because of COVID-19, they will need to contact their lender for ‘tailored support’.

The FCA reminds borrowers that “consumer credit customers who can afford to do so continue to make repayments. Borrowers should only take up this support if they need it”.

Posted on

FCA publishes updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 15 July 2020, the UK Financial Conduct Authority published updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s updated guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a short feedback statement.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

Posted on

FCA consults on draft updated temporary guidance to motor finance and high cost credit firms dealing with customers needing COVID-19 related payment deferrals

Earlier today, on 3 July 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.

There’s draft guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a draft handbook instrument.

My one page summary is (and you can see a bigger version if you click on it):

If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.

Posted on

Voluntary terminations for regulated hire purchase and conditional sale agreements – does a customer have to take care of the vehicle whilst collection arrangements are being made?

The current COVID-19 restrictions mean asset and motor finance lenders are unable to collect vehicles as quickly as they’d like when a customer voluntary terminates a hire purchase or conditional sale agreement under Section 99(1) of the Consumer Credit Act 1974. Can you ask your customer to carry on taking care of the vehicle whilst you make arrangements to collect it?

After an agreement has been voluntarily terminated, the customer is likely to be a gratuitous bailee of the vehicle.  This type of bailment is known as a ‘deposit’ because the customer keeps possession of the vehicle without payment.

It’s likely there is two possible types of bailments: (a) involuntary deposit or (b) necessary deposit.

Involuntary deposit – this is where the vehicle is left with the customer against her wishes. In most cases, the customer will need to take reasonable care of the vehicle. But the customer will normally need to make good any damage caused deliberately but not negligently.

Necessary deposit – this is where the vehicle is left with a customer because of a peculiar stress or set of circumstances such as an unforeseen disaster (which the Covid-19 pandemic and lockdown arguably could fall into). The customer is likely to be responsible in negligence or bad faith whilst she has the vehicle.

So how do you protect your position and the vehicle? Talk to your customer. Ask if they’re willing to hold on to the vehicle whilst you make your collection arrangements. And talk to them about insurance, and who is going to pay for it.