FCA Guidance for Insurance and Premium Finance Firms to Support Customers - Which? response

We are pleased that the FCA has published this guidance as it recognises the importance of ensuring people continue to be supported in the coming months to mitigate the negative impact and the great uncertainty that lies ahead.

We are disappointed, however, that the FCA is restricting availability of payment deferrals and resuming normal credit reporting. We are particularly concerned about the lower level of firm engagement with vulnerable consumers.

We disagree with the widespread removal of protections, across all financial products, that have been afforded to consumers during the last six months. Those who may not have needed financial support so far might find themselves in temporary difficulty after the Job Retention Scheme (JRS) ends, but it will no longer be available to them. This seems against the principle of treating customers fairly.

It is highly likely that many consumers’ financial situations will worsen due to a loss of employment income after the end of this month, therefore we should expect to see a spike in consumers who will need to access temporary support. Last quarter we saw a record jump in redundancies and an increase in the unemployment rate to 4.5% , which is expected to climb to 7.5% by the end of the year. 2.51million people are still receiving support from the JRS. 

The crisis is still ongoing, with further lockdowns being introduced, and these unprecedented circumstances should shift what is considered ‘temporary’. We are concerned that these protections have come to an end after an arbitrary period of time.