On 27 January 2021, the Financial Conduct Authority (FCA) published its finalised Tailored Support Guidance for Mortgage Lenders and Consumer Credit Lenders, both of which have effect from 29 January 2021.
As per the draft Guidance which was previously published, and following a short consultation period for stakeholder comments, the Guidance for mortgage lenders precludes them from taking enforcement action via seeking or enforcing a warrant of possession or restitution until 1 April 2021. The narrow exceptions to this prohibition include whether the borrower requests that enforcement action continue.
As to consumer credit lenders, the updated Guidance is now that before 31 January 2021, a firm should not, absent exceptional circumstances, terminate a regulated agreement or repossess goods or vehicles under the agreement that the customer needs.
Exceptional circumstances may exist:
- where the customer wishes to continue with repossession (including return of goods claims which the customer requests be continued);
- where the customer has parted with possession of the goods or vehicle (such as where they have been abandoned); or
- where the customer wishes to voluntarily terminate the credit agreement and surrender the goods or vehicle.
In all cases, the FCA reminds firms that they should adhere to all relevant government guidance on lockdowns (including social distancing and shielding) when considering, and when actually taking, possession.
It is important to remember that in paragraphs 7.3 of the mortgage lender Guidance, and paragraph 6.4 of the consumer credit lender Guidance, that court proceedings are permitted to continue, up to and including the point of obtaining either an order for possession or for return of goods respectively. This means that LPC Law’s stakeholders can continue to seek such orders from the court without there being any prohibition on doing so.