FCA has published its thematic review report on early arrears management in unsecured lending.
The report sets out how the FCA conducted the review, its findings and, where relevant, how firms are currently meeting the relevant rules and guidance. Key findings include the following:
- For customers showing signs of financial difficulty, the FCA found that the majority of firms missed early opportunities to identify them and offer appropriate forbearance.
- Most firms were complying with CONC and other relevant standards. However, within the firms reviewed, there was a lot of ongoing change prompted by the introduction of FCA regulation.
- Forbearance and repayment solutions offered to customers varied quite significantly. The FCA found that the firm’s culture influences how much due consideration and forbearance it gives to customers in arrears difficulties.
- Around two thirds of firms had policies aimed at achieving fair outcomes for customers. However the firm’s intentions and policies were not always carried out by staff in practice.
The FCA advises all firms across the wider industry to read the report and consider their culture and approach and, where necessary, make improvements.