Together with Ofgem, Ofwat and Ofcom, we've set out our expectations for firms across markets, as many consumers feel the strain from cost of living pressures.
We’ve joined forces with other regulators to call on firms to improve debt collection practices. This is especially important as many consumers continue to feel the strain from cost of living pressures and risk falling into arrears.
Together with Ofgem, Ofwat and Ofcom, we've set out our expectations across markets, urging firms to:
- make sure customers in debt do not receive excessive communication
- use supportive language
- clearly signpost free debt advice
- make it easy for debt advisers to contact them on behalf of clients
The expectations are based on the comprehensive rules and guidance already in place in financial services. The Consumer Duty has set a higher standard of consumer protection, building on guidance for how firms should support vulnerable customers and borrowers in financial difficulty.
Where firms fail to meet the high standards we expect, we take robust action.
In 2020, we fined firms a total of £90m for failures in how they treat customers in arrears, with firms paying over £570m in compensation to customers.
We've also worked with nearly 100 lenders to improve the way they treat customers in difficulty, securing almost £60m in compensation for 270,000 customers.
To protect consumers dealing with the cost of living squeeze, we've also:
- reminded 3,500 lenders how we expect them to provide tailored support to borrowers who get into financial difficulty
- updated our rules to support key commitments made by lenders as part of the Government’s mortgage charter, building on our guidance for how lenders can help customers worried about keeping up with payments
- overhauled overdraft charges, saving consumers nearly £1bn
- banned providers of debt advice from receiving referral fees from debt solution providers, saving consumers struggling with debt thousands of pounds in unnecessary fees and ensuring they receive better quality advice
- warned banks to improve the way they treat small business owners when collecting and recovering debts
- warned insurers to protect customers from unnecessary products or add-ons and unfair penalties