Financial watchdog tells lenders to treat borrowers better as the cost of living crisis worsens - here's all you need to know
The financial regulator has told lenders that they must ensure they are not overcharging customers and are treating them fairly as the cost of living crisis worsens.
The regulator said it had seen failing across the lending sector but that more serious problems were found at more than 30 firms, largely in the consumer credit sector. We asked the FCA for a list of these firms but it did not want to do so.
If you're struggling with debt and are thinking of borrowing money, see our Debt problems guide for more information or head to our Cost of living guide for money tips and guidance. Remember to carefully assess your situation as you'll still need to pay back the money you borrow.
Lenders should ensure any fees and charges levied are fair
To better support customers, the FCA said it expects lenders to:
- Provide customers with an appropriate level of care and support.
- Give borrowers in financial difficulty appropriate tailored forbearance (ie being allowed to pause payments) that is in their interests and takes account of their individual circumstances.
- Support borrowers showing signs of financial difficulty or struggling with debt.
- Ensure that any fees and charges levied on borrowers in financial difficulty are fair and do no more than cover the firm's costs.
- Make sure their approach to taking on new borrowers takes account of the financial pressure they may be facing and the impact on their expenditure.
- Consider what more they can do to encourage mortgage borrowers to think about switching to a less costly option where it is available.
- Help consumers avoid falling victim to scams or illegal money lending.
If you're considering borrowing, use our Loans eligibility calculator to see how much you could get. Remember, if you have extreme debts, a formal debt solution – bankruptcy, individual voluntary arrangement or debt relief order may be the only way back. It's not a step to be taken lightly, and you should ALWAYS seek debt advice first.
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