StepChange responds to FCA’s proposals to make permanent requirements on lenders to support borrowers in financial difficulty

StepChange Debt Charity welcomes the FCA’s proposals today which will make permanent requirements on lenders to treat borrowers in financial difficulty fairly. This is following temporary guidance introduced during the pandemic. The FCA has also announced it will act quickly if firms fail to appropriately support struggling customers.

Richard Lane, Director of External Affairs at StepChange, said:

“High interest rates and inflation continue to place immense pressure on household finances, and demand for our services has been consistently higher this year compared to last, so the FCA’s proposals to ensure borrowers have the support they need are crucial.

“Our own research has shown that people showing signs of financial difficulty need help as early as possible to prevent them getting trapped in a spiral of harmful, unaffordable borrowing in order to make ends meet. Communications from lenders making demand for payment can be frightening for people experiencing problem debt, causing them to disengage, an issue which we’ve found to be more prominent among borrowers with additional vulnerabilities.

“It must be a priority for lenders to focus on developing appropriate support for their customers, which identifies financial difficulty at the earliest possible stage, ensures support is tailored to individual needs, and makes effective referrals to free debt and money advice.”