Car repossessions will be allowed to recommence at the end of this month despite the Financial Conduct Authority (FCA) extending help for mortgages.
The FCA said today (Jan 13) it’s proposing to extend its guidance so that firms should not enforce mortgage repossessions before April 1, 2021 rather than January 31, as agreed in November 2020.
However, the FCA also said it doesn’t intend to do the same with goods and cars, meaning they can be repossessed from January 31, but ‘as a last resort’ and subject to complying with relevant government rules regarding coronavirus.
A statement said: ‘Our proposed approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home.
‘For customers who remain in payment difficulties under a relevant consumer credit agreement, continuing to restrict repossessions may not be in their interests.
‘The shorter terms and higher interest rates on these agreements, combined with the depreciating value of the goods or vehicles, means that they could end up owing more in the long term if repossessions are prevented.
‘Our approach, therefore, takes appropriate account of the risks to customers of further asset depreciation, whilst providing appropriate protections by ensuring that firms repossess only as a last resort and also consider the impact of repossession action on those who are vulnerable, as well as following relevant government public health guidelines and regulations when undertaking repossession action.’
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