When you are met with a financial emergency, it can be a challenging time to make sure that you can pay off the unexpected bills or car repairs without negatively impacting your credit score or the future of your finances. In this article, we will be providing you with insight into the customer credit threat and how it could impact you.
The Impact Of The Pandemic On The Industry
When looking at the access to customer credit it is important to note that the pandemic has had a huge impact on the industry. With the FCA providing those who were currently paying back a loan with continued forbearance for those that have been struggling during the pandemic this has had a huge impact on payments and the regular payments of loans thus requiring increased communication between lenders and borrowers as a result.
Credit Complaints Are Increasing
In addition to the forbearance leading many to forget about their monthly repayments, it is important to note that credit complaints have also increased. With the FCA regulations make it fairer for those looking to opt for payday loans UK options and other forms of loans several complaints have also come along with this. This has had a significant impact on the customer credit industry as it has meant there is a backlog as well as an impact on the Liquidity of the industry as well as its daily operations throughout the course of the financial year.
Increased Claims From CMC
Throughout the PPI claims scandal, we have seen a significant increase in the number of claims management companies on the market. Whilst this was a benefit to customers that were looking for the help needed to claim back PPI this has gone on to affect the industry greatly as there have now been more misconduct claims. With elements that used to go unnoticed now being bought forward in claims, this has presented a number of issues for some of the worlds leading lenders. This has also meant that FCA regulations have had to change in order to regulate this correctly.
Struggling With Claims Made.
With the number of claims being made slowly increasing, it is important to note the impact that this is having on the industry as a whole. With many struggling to keep up with rising repayments as a result of the APR and rising default interest rates, several reports are suggesting that these claims from borrowers could have a significant impact on the future of the industry. Not only could the FCA implement tighter regulation, but lenders could be expected to conduct even more background checks before they are able to lend to the borrowers, particularly through online applications.
With this in mind, there are several ways that the customer credit industry is being impacted as a result of the pandemic in the not-so-distant future. Will you be using customer credit to aid you in case of a financial emergency in the future.