FCA: Credit shouldn’t be demonised as cost of living bites
As cost of living challenges bite, the “use of credit should not be demonised”, according to Emily Shepperd, chief operating officer at the Financial Conduct Authority (FCA).
In a speech delivered at the Chartered Institute for Securities and Investments’ Financial Planning Conference, Shepperd pointed out that credit can help smooth unexpected bills and can be a lifeline if it’s affordable and managed correctly.
But, she also added that the regulator has concerns around ensuring that people understand the cost of credit and how much they are borrowing, while making sure that lenders are offering the right information and deal for customers.
“We are also keen to make sure that lenders help customers at the first signs of vulnerability – and that customers speak to lenders as soon as they feel they may not be able to make their usual payments,” she added.
Shepperd, who is also the executive director for authorisations at the City watchdog, highlighted the progress the FCA made supporting firms and protecting consumers.
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Since December last year, the regulator has been able to slash pending cases for authorisations by more than 45 per cent to 6,600, and have worked to step up the scrutiny of new businesses.
Meanwhile, it has launched its Scamsmart campaign to highlight common scams and protect vulnerable consumers from fraudsters who might take advantage of them in the current environment.
“We have asked financial services firms such as banks and insurers to keep a watchful eye on consumer behaviour and to offer help and forbearance where they can,” she said.
“We would recommend customers take the right advice if seeking to take drastic action over the finances. And we know many small businesses will be worried about rising rates too and we are mindful of the impact this will have on them.”
The FCA is also exploring simplifying the advice regime for mainstream stocks and shares ISAs, where it believes the risks to consumers are relatively low.
It will help remove some of the burden on advisers, Shepperd said, which will enable them to reduce charges and make advice more accessible.
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