By Huw Jones
LONDON (Reuters) – Britain’s Financial Conduct Authority said on Thursday it would stop banks from lending if they failed to treat customers caught up in the cost of living crisis fairly.
Many consumers are struggling to pay their bills as inflation hits 40-year highs of over 10%, energy costs rise after Russia’s invasion of Ukraine and interest rates interest rates rise, with further increases expected from the Bank of England on Thursday.
The FCA released a report on Thursday on how banks have responded during the COVID-19 pandemic and lessons that could be applied in the current cost of living crisis.
“We want companies to review the content of this report and take immediate action if necessary to ensure they are well positioned to support customers now, and as the situation becomes more difficult in the months ahead,” says The report.
The watchdog said it has already told 32 businesses to make changes to improve the way they treat customers and so far seven of them have voluntarily agreed to pay £12million ( $13.51 million) in compensation to nearly 60,000 customers.
“We will take action to restrict or prevent businesses from lending to people if they fail to meet our requirements that consumers in financial difficulty be treated fairly,” said Sheldon Mills, FCA’s executive director for consumers and society. competition.
The watchdog said it will be looking closely at 40 more companies in the coming months to make sure they meet its expectations and to protect customers from harm.
($1 = 0.8885 pounds)
(Reporting by Huw Jones; Editing by Jason Neely and Jan Harvey)