THE BVRLA has submitted its formal response to the Financial Conduct Authority on future guidance on forbearance for motor finance customers.
The FCA had requested feedback on:
- What support should people get after two payment deferrals
- What support will be needed post 31 October for those facing redundancy
- BVRLA member feedback on the PCH market
The BVRLA agreed with the FCA’s view that protecting the best interest of the customer should always be the priority. However, the BVRLA said that there was a fine balance to be struck between providing short term relief and allowing the customer to end up with a substantially increased debt burden.
Elsewhere in the response the BVRLA suggested:
- A swift return to standard forbearance rules based on the CONC 7 handbook
- That the FCA should work with HM Treasury on amendments to the Consumer Credit Act to allow for greater flexibility on contract amendments where they are to the benefit of consumers
- Recommended the FCA did not take a blanket approach to early termination fees and allowed firms to use the existing forbearance rules to find a solution that were in the best interests of the customer
- Requested the FCA to create a procedure for firms to repossess vehicles, particularly if a customer has ceased insurance payments.
The FCA will be publishing its updated guidance shortly.
Automotive and fleet writer for Broker News
