The BVRLA has submitted its response to the Financial Conduct Authority, which has been seeking industry input to inform future guidance on forbearance for motor finance customers.
The FCA was specifically looking for 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 association 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 association:
- Calls for a swift return to standard forbearance rules based on the CONC 7 handbook
- Asks the FCA to 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
- Recommends that the FCA does not take a blanket approach to early termination fees and allows firms to use the existing forbearance rules to find a solution that is in the best interests of the customer
- Asks 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.