Credit Cards: Debts

(asked on 11th February 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with the Financial Conduct Authority to determine the effect of the persistent credit card debt remedies introduced in February 2018, and what steps his Department is taking to ensure that credit card holders do not pay more than the amount borrowed in interest, fees and other charges.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 24th February 2020

The Financial Conduct Authority (FCA), as the regulator responsible for the consumer credit market, has taken a range of steps to protect consumers in this market. These include the introduction of new rules in February 2018 to help customers in persistent credit card debt. The rules require firms to better identify struggling customers, carry out greater interventions, and exercise forbearance for those struggling most. In its Policy Statement PS18/4, the FCA commits to reviewing the new rules in 2022 or 2023, once they have been fully implemented by firms and in operation long enough to assess consumer outcomes.

On 3 February 2020, the FCA wrote to credit card firms to reiterate their expectations for handling customers in persistent debt. This letter outlined that firms should encourage customers to open a dialogue about potential repayment arrangements, and, where customers cannot afford the options proposed, firms should consider reducing, waiving, or cancelling any interest or charges.

Treasury ministers and officials meet regularly with the FCA, and the Government will continue to work closely with the FCA to ensure consumers of financial services are treated fairly.

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