FCA proposes reliefs for motor finance, payday loans, buy-now pay-later, rent-to-own and pawnbroking

FCA has proposed further reliefs for consumers facing payment difficulties due to coronavirus, including:

• 3-month payment freeze for motor finance customers;
• 1 month interest-free payment freeze for high-cost short-term finance (including payday loans) customers;
• 3-month payment freeze to rent to own (RTO), buy-now pay-later (BNPL), or pawnbroking customers;
• pawnbrokers and BNPL lenders to extend the redemption period and promotional period, respectively, for the 3-month freeze period;
• Repossession not to take place during the 3-month freeze period  for RTO customers; and
• No additional charges/fees from customers if pawnbrokers and RTO firms are unable to redeem, collect or repossess goods due to social-distancing measures. 

Except in the case of high-cost short-term credit, firms will be able to continue to charge interest during the payment freeze.