The FCA has today published the letter it sent to the Board of Directors of mainstream Consumer Credit Lenders.
The letter sets out the FCA’s:
- views of the risks these lenders pose to their consumers or the markets in which they operate;
- expectations of these lenders including how they should mitigate these risks; and
- supervisory strategy and programme of work to make sure that these lenders are meeting their expectations and that harms are being remedied.
The main potential harms identified in the letter are:
- inadequate affordability checks leading to over-indebtedness
- inadequate or effective arrears policies and procedures leading to inappropriate outcomes for those in financial difficulty
- potential unfair treatment of customers whilst firms try to navigate the persistent debt requirements
- lack of transparency around pricing.
As a result of this, the FCA will be focusing its programme of work in addressing these harms, at the same time as working through Brexit.