FCA consultation: Updated Mortgages - Tailored Support Guidance - Which? response

Which? supports the continuation of the tailored support guidance in place of the payment deferral guidance from 1 April 2021.

Which? welcomes the FCA’s continued interventions to support consumers who are impacted by the coronavirus pandemic. We agree with the FCA that payment deferrals are not always in a consumer’s best interest. While they were a necessary option to support the millions of consumers affected financially by the coronavirus pandemic over the past year, more tailored support is likely to be required for a smaller group of consumers now and in the future.

Which?’s consumer insight tracker continues to see much higher rates of missed payments among those people who have been furloughed or lost hours because of the crisis compared to those working as usual, and among those in low income households (under £21,000). The continued high rates among these groups could yet point to difficulties ahead if, as forecast, the unemployment rate increases in the coming months.

The FCA’s tailored support guidance places higher expectations on firms in terms of how they meet their customer’s needs and suggests a wider range of potential options. We believe this is more appropriate to meet the developing needs of mortgage customers. We therefore support the ending of access to payment deferrals under the FCA’s payment deferral guidance on 31 March 2021.

The FCA should, nonetheless, continue to monitor firms’ ability to meet the scale of the need among their customers on a more tailored basis. It should intervene swiftly to address any shortfalls in the support required, by taking steps to ensure consumers are not disadvantaged by poor customer service. The guidance should also be kept under review in light of the changing impact of the pandemic, and it should be amended where necessary.