COVID-19 Update for individuals - FCA confirms interest free overdrafts and credit holiday package

The Financial Conduct Authority (FCA) has confirmed a package of temporary measures to help people with some of the most commonly used consumer credit products. 

Following a short consultation the FCA will be going ahead with the proposals I outlined last week, which will give firms the flexibility under the FCA rules to provide temporary financial relief to those facing payment difficulties during the COVID-19 pandemic.

The rule changes, which came into force on the 9 April apply from yesterday (Tuesday 14 April 2020). 

The measures include firms being expected to:

• Offer a temporary payment freeze on loans and credit cards for up to three months
  
• Allow zero interest arranged overdraft for up to £500 for three months
• Make sure that all overdraft customers are to be no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force 
• Ensure consumers using any of these temporary payment freeze measures will not have their credit file affected 

To ease pressure on the lenders, consumers are advised to use online services to request assistance.