FCA guidance on interest-only debt

The Financial Conduct Authority last week issued guidance to lenders and third-party administrators about how to treat interest-only customers who risk being unable to repay their loan.

In May, the regulator launched a consultation in which it sought views on how to deal with these borrowers.

The FCA says firms should have a written strategy in place setting out their procedural framework for managing these customers and should consider what options can be offered.

It also says staff should be trained to deal with these customers and given guidance.

Firms should also collate enough information to enable a firm to monitor its interest-only back book, the FCA says.