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FCA: Lenders have ‘more work to do’ on arrears handling

The Financial Conduct Auth-ority says mortgage lenders must do more to ensure that front-line staff treat customers in arrears fairly.

In a thematic review of lenders’ arrears management and forbearance policies, published this week, the regulator says arrears management has improved since its previous review in 2009 but some areas of concern remain.

The FCA says lenders need to place greater emphasis on delivering consistently fair outcomes based on customers’ individual circumstances, and on ensuring that front-line staff have the knowledge to make informed decisions.

The review found that borrowers with sensitive circumstances, such as those dealing with bereavement, did not have those factors consistently identified by front-line staff in some firms. 

Referrals to specialist teams were also missed.

FCA director of supervision Clive Adamson says: “Since we last looked at arrears management we have been pleased by firms’ progress. 

“However, there is still work to do.

“We want firms to take further action to strengthen their arrears management practices and invest in their systems and people to make sure that they get this right.”

The review found that the culture of treating customers fairly is not always fully embedded at firms.

The FCA also says firms should take proactive steps to identify borrowers who could be at risk from potential interest rate rises.

Trinity Financial product and communications manager Aaron Strutt says: “Lenders may find it difficult to accurately identify those at risk from future rate rises as they do not have a great deal of contact with borrowers who pay on time.”

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