The possibility of further FCA intervention has been announced in relation to motor finance, pay day loans, buy-now-pay-later agreements (BNPL), rent-to-own (RTO) and pawn broking. The proposals set out below are set to be finalised by Friday 24 April 2020, with them coming into force shortly afterwards.

Motor Finance

Motor finance providers should offer three month payment breaks for those customers who have found themselves in financial difficulty due to the coronavirus. They should also not take steps to end any agreement or repossess vehicles.

Where a personal contract purchase (PCP) comes to an end and a customer wishes to keep their vehicle but now finds themselves without the cash to make the balloon payment the finance provider should work with the customer to come to a suitable solution.

High- cost lenders

Pay day lenders should be providing a one month interest free payment freeze to customers facing financial difficulty.

Other credit products

Again finance provider’s that offer BNPL, RTO and pawn broking are expected to offer three month payment breaks to those in financial difficulty due to Coronavirus. The FCA is proposing that firms should also take the following steps in relation to specific products:

  • pawnbrokers should extend the redemption period for the 3-month freeze period or, if the redemption period has already ended, agree not to serve notice to sell an item that has been pawned for that period. If the firm has already informed the consumer they intend to sell the item, they should suspend the sale during the payment freeze
  • if a BNPL customer is within the promotional period, firms should extend this by the length of the payment freeze
  • RTO firms should provide a 3-month payment freeze. In addition, if a customer needs the goods during the guidance period, repossession should not take place
  • if social distancing means that pawnbrokers and RTO firms are unable to redeem, collect or repossess goods, they should not pass on any additional charges or fees to the consumer

There is also recommendations that interest should be waived for customers who require full forbearance.

Should you be in financial distress or would like to discuss other ways of improving your cashflow please contact one of our offices or Lindsay Farrer on 01228 534371 or email

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