Published: 26th May 2020

Complyport a leading compliance and regulatory consultancy has warned, business managers, brokers and financial advisers to ensure they are compliant with current changes in regulations that cover loans, credit agreements and other agreements regulated by the FCA. Changes include the FCA accepting digital signatures on loan agreements, the FCA support for motor finance and high cost credit customers consumers facing payment difficulties due to coronavirus (Covid-19). The measures came into force on 27 April 2020.

The range of targeted temporary measures cover:

▪ motor finance

▪ high-cost short-term credit (including payday loans)

▪ other credit products such as buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking.

There will be a 3 month payment freeze for motor finance, buy-now paylater (BNPL), rent-to-own (RTO) and pawnbroking agreements. For high  cost short term credit (including payday loans) payments will be frozen for  one month with no additional interest to be charged.

Motor finance:

▪ Firms to provide a 3 month payment freeze to customers who are having temporary difficulties meeting finance or leasing payment due to coronavirus. If customers are experiencing temporary payment difficulties due to coronavirus and need use of the vehicle, firms should not take steps to end the agreement or repossess the vehicle.

▪ Firms should not alter Personal Contract Purchase (PCP) or Personal Contract Hire (PCH) agreements in a way that is unfair. For example, firms should not try to recalculate PCP balloon payments based on a temporary depreciation of car prices caused by the coronavirus situation. The FCA expect firms to act fairly where terms are adjusted.

▪ Where a customer wishes to keep their vehicle at the end of their PCP agreement, but does not have the cash to cover the balloon payment due to coronavirus-related payment difficulties, firms should work with the customer to find an appropriate solution. Given the increased potential for disparity between the balloon payment and the value of the vehicle in the current climate, firms should ensure that solutions do not lead to unfair outcomes. For example, refinancing the balloon payment might not be appropriate in the circumstances.

High-cost short-term credit (including payday loans):

▪ Firms to provide a 1 month payment freeze to customers facing temporary payment difficulties due to the coronavirus pandemic. No additional interest should be charged to the customer as a result of the payment freeze. This shorter period reflects the much shorter length of most of these loans and the higher interest rates compared to other high cost credit products.

▪ The FCA expects firms to use the deferral period to engage with their customers to understand whether they are likely to be in a position to resume payments. Where the customer continues to face payment difficulties the FCA expects firms to provide forbearance in line with its rules. This could include one single payment after the end of the term or by a number of smaller instalments.

▪ High-cost-short-term-lenders are also reminded, like all lenders, to consider whether immediate formal forbearance may be more suitable if a customer was already in financial difficulty before the impact of coronavirus. If the consumer expects their financial difficulties to last longer than a month, then immediate forbearance may be more suitable.

Complyport has warned that electronic and digital processes must still fulfil existing legal requirements.   The FCA recently confirmed it would accept electronic signatures for fund-related applications and on all applications from mutual societies.

The FCA has stated that appropriate steps need to be taken onboard to minimise the risks involved with using electronic signatures, especially those which may impact their responsibility to treat customers fairly with due care.

Paul Grainger CEO of Complyport Ltd:

“Financial services practitioners need to ensure that despite for many of them now they are working from home, there is a responsibility on them to ensure that they are up to speed on the  FCA rules introduced during the COVID-19 crisis.”

“So we would expect firms to take a pragmatic approach to how they interpret their own procedures in this regard.”



Notes to Editors:

For media enquiries:

John Kaponi –  IPM Media Consulting Ltd:

07875 542 969


Notes to Editors:


  1. To arrange an interview with Paul Grainger CEO of Complyport Ltd please email or call John Kaponi


  1. Complyport is a leading compliance and regulatory consultancy providing bespoke, practical solutions for all manner of regulated firms both in the UK and overseas. Our specialist compliance services expertise can either sit alongside your current compliance teams or, for an independent solution, we can bring our team in-house.
  2. Established in 2002, Complyport combines former regulators, industry practitioners and legally qualified individuals to offer our clients an unparalleled, professional team.


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