The proposals outline the options firms will provide for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking customers who are coming to the end of a payment freeze, as well as those who are yet to request one.

For motor finance, BNPL, RTO and pawnbroking customers that have already taken up support, and who are still experiencing payment difficulties, firms would continue to offer support with options including a further payment deferral or reducing payments to an amount the customer can afford for a further three months.

Christopher Woolard, FCA interim chief executive, said: 'It is vital that people facing temporary payment difficulties because of the impact of coronavirus get the assistance they need. For those who have already taken a payment freeze and can afford to start making payments, even partially, it is in their best interest to do so, but for those that need help it will be there.'

Under the plans, at the end of a first payment freeze, firms should contact their customers to find out if they can resume payments - and if so, agree a plan on how the missed payments could be repaid.

For those customers still facing temporary payment difficulties as a result of coronavirus, firms should provide them with support by freezing or reducing payments to a level they can afford, on their motor finance, BNPL or RTO agreements for a further three months.

For BNPL customers, where a loan is within the promotional period, this would mean offering customers an additional extension to that period.

For pawnbroking agreements, where the loan is within the redemption period, this would mean firms extending that period for three months or agreeing not to sell or suspending the sale of an item for three months if the redemption period has already finished.

For high-cost short-term credit customers who have had a payment freeze and are still experiencing payment difficulties, firms should be providing a range of support - including formal forbearance.

Customers that have not yet had a payment freeze, will be able to request one up until 31 October, and the ban on repossessions should continue until that date. This applies to motor finance and RTO customers still facing temporary payment difficulties as a result of coronavirus and who need their vehicles or goods.

Where a customer needs further temporary support to bridge the crisis, any payment freezes or partial payment freezes offered under this guidance should not have a negative impact on credit files.

The FCA’s proposals are open for comments until 6 July and the regulator expects to finalise the guidance shortly afterwards.

Useful links

Motor finance and coronavirus updated guidance

High-cost short-term credit agreements and coronavirus updated guidance

Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus