Payday loan and car finance customers will be able to request temporary payment freezes under measures aimed at easing the immediate difficulties of those who are financially affected by the Covid-19 crisis.
The Financial Conduct Authority (FCA) confirmed on Friday that it will go ahead with a package of proposals it had outlined previously.
The temporary measures will come into force from Monday 27 April.
Customers should be able to request a payment deferral at any point after the guidance comes into force.
A three-month payment freeze will be offered for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements.
For high-cost, short-term credit – including payday loans – payments will be frozen for one month, with no additional interest charged.
Christopher Woolard, interim chief executive of the FCA, said: “We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products.
“Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments.”
The new motor-finance measures mean that firms should provide a three-month payment freeze to customers who are having temporary difficulties meeting finance or leasing payments because of the coronavirus lockdown.
If customers are experiencing temporary payment difficulties and need use of the vehicle, firms should not take steps to end the agreement or repossess the vehicle, the FCA said.
The regulator also said it expects firms to act fairly where terms are adjusted.
Where the customer continues to face payment difficulties, it expects firms to provide forbearance in line with its rules.
If a customer is unable to start making payments again at the end of a payment deferral period, they should contact their lender. The firm should work with the customer to resolve these difficulties in advance of payments being missed, the FCA said.