Regulatory Alerts2017-03-28
Added · Updated
CP17/10: Consultation on persistent debt and earlier intervention remedies
The Financial Conduct Authority proposes remedies to address the situation where more than 3 million credit cardholders are in persistent debt, defined as paying more in interest and charges than the borrowed amount over an 18-month period. The proposals aim to rebalance incentives for firms and customers to prevent credit card debt from becoming persistent and to provide help to those who cannot afford to repay more quickly. The document highlights that customers in persistent debt pay approximately £2.50 in interest and charges for every £1 repaid, noting that firms currently have few incentives to address this as these customers are profitable.