FCA says credit card companies are not doing enough to aid those in persistent debt
The FCA has told credit card companies that they must do more to help customers who are in persistent debt.
In 2018 the Financial Conduct Authority (FCA) introduced new rules aimed to help those customers who had been in persistent credit card debt for the last 36 months. Their recent research though has found that credit card companies are not doing enough to help these struggling customers.
Under the new rules, credit card companies should be working with those customers that are paying more in interest, fees, and charges than their starting balance, to find a way to help them to affordably pay the balance off.
If customers simply cannot afford to pay their debt, then the FCA have told credit card companies to reduce or waive the charges.
As of November 2019 there were still 1.78 million people in the UK stuck in persistent credit card debt. According to the FCA, if credit card companies helped these people to get out of debt, they could save them up to £1.3bn a year in lower interest charges.
A recent review performed by the FCA found that the repayment options being offered by many credit card companies are “not reasonable and sustainable for customers”.
It also found that a worrying number of credit card companies were issuing these vulnerable customers with blanket suspensions and cancelling their credit cards.
The FCA have issued a statement addressing the problem and informing credit card companies that they are not allowed to suspend a credit card without an objectively justifiable reason.
Here at Churchill Recovery Solutions we provide effective and ethical debt collection services to businesses in a variety of industries including banking and financial collection.
For help or advice with collecting debt or arrears prevention, get in touch with our team by giving us a call on 0333 320 0748.