Credit, Collections & Insolvency News
The Financial Conduct Authority (FCA) has confirmed that repossessions may be allowed from 1st April but only as a last resort.
The regulator implemented a moratorium amid the coronavirus crisis, protecting people from repossession proceedings, with this extended to April in January.
The FCA has said that as of next month, firms are able to enforce repossessions if they act in line with guidance saying they should “only take place as a last resort if all other reasonable attempts to resolve the position have failed.
The mortgage tailored support guidance sets out the FCA’s expectation that firms should not enforce mortgage repossessions, except in exceptional circumstances, before 1st April.
The updated draft guidance has been published to ensure that mortgage customers whose homes may be repossessed are treated fairly and appropriately, particularly where there are risks of harm to customers who are vulnerable as a result of coronavirus (Covid-19).
This means that from 1st April, firms can enforce repossessions, but only if they act in accordance with our guidance, and regulatory requirements which means that repossession should only take place as a last resort if all other reasonable attempts to resolve the position have failed. Firms will also need to comply with any relevant legislative requirements which may prevent firms from enforcing repossession in certain parts of the UK. The FCA says that it recognises that repossessions can be difficult and stressful but delaying repossession can lead to poor customer outcomes as a result of increased balances and equity erosion. This is why we propose to allow firms to repossess homes when it is fair and reasonable to do so.
In relation to consumer credit, the FCA has updated the credit Tailored Support Guidance so that firms were able to repossess goods and vehicles from 31st January 2021, but only as a last resort, and in accordance with all relevant government public health guidelines and regulations (including social distancing and shielding) when taking possession.