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News for Members

16 December 2016

FCA Early Arrears Management Thematic Review

The FCA has published the findings of a new report which looks at the way that lenders treat customers in the early stages of arrears. 

A firm's early arrears approach often establishes the tone of its relationship with its customers, setting them on a particular path and can be critical to the ultimate outcome for these customers. Firms which put customers at the heart of what they do see the benefits of positively engaging with customers and agreeing sustainable payment solutions.

The report follows the FCA's previous review of arrears in high-cost short-term credit and aims to broaden its focus and examine arrears in a range of unsecured lending products including personal loans, credit cards and retail finance.

The key findings of the report were:

Not all customers who pay late are facing repayment difficulties but for those who were showing signs of financial difficulty, the majority of firms missed the early opportunities to identify them and offer appropriate forbearance

Within the firms reviewed, the introduction of FCA regulation had prompted positive changes demonstrating a clearer awareness of the interests and needs of customers

The forbearance and repayment solutions offered to customers varied widely 

Firms' intention towards assisting customers in arrears also varied and a firm's culture influences the approach taken.

To find out more or to view the full report, visit the FCA's website.

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