Supporting customers in financial difficulty

Almost a quarter of UK adults are considered to have "low financial resilience" and millions are slipping behind on bill and loan payments. With lenders having been ordered by the FCA "to make changes to improve the way they treat their customers", Neasa MacErlean explores how firms can meet regulatory expectations.

Re-assessing the ability of borrowers to meet their consumer credit payments is one of the main tasks now facing the 35,320 firms regulated by the FCA in this sector. Warned to be "proactive" by the regulator, they have been put on alert about potential enforcement action. But it comes at a difficult time for the overall lending sector - as lenders struggle with rising interest rates, exemplified by Credit Suisse and Silicon Valley Bank. The March decision of Amigo Loans to wind down [1] is another blow to the sector, as it named regulation, the Consumer Duty and affordability issues as reasons it could not find enough investment to continue.