The Financial Conduct Authority (FCA) has ordered banks and lenders to support financially struggling borrowers in repaying their mortgages and loans. The decision on Thursday came as many Britons are impacted by the interest rate rise.

FCA’s Push to Support Struggling Borrowers

The UK’s financial market watchdog has already worked with almost 100 lenders to evaluate the way they are treating borrowers. It has found several issues, including inadequate tailored support for individual circumstances, failure to appropriately respond to vulnerable customers, and inefficient money guidance and debt advice.

The regulator even secured up to £47 million of redress from 17 lenders for over 195,000 customers. These lenders failed to support the customers in their difficulties.

“Where we see firms not providing the right support, we will act quickly to put this right. Firms are already paying up to £47m in compensation for not providing appropriate support to borrowers,” Sheldon Mills, the Executive Director of Consumers and Competition at the FCA, said.

Making Pandemic-Era Rules Permanent

The latest guidance came as an extension of such rules brought during the pandemic period to provide relief to the stressed browsers. In addition, the regulator is considering making these rules permanent.

These rules will mandate “mortgage, consumer credit, and overdraft providers” to support struggling customers in making repayments by making reduced or temporarily no payments or changing the debt terms. They also need to ensure that the payment arrangements are appropriate and that customers receive appropriate financial guidance. The enders cannot arrears fees higher than necessary and must consider the overall impact of support arrangements on mortgage balances.

“Many firms have been following our temporary guidance, developed during the pandemic, to support borrowers in tough times. Our proposals today will help ensure this continues,” said Mills. “If you’re worried about keeping up with payments, we encourage you to talk to your lender as soon as possible.”