Payment holiday takers trapped by lending rules amid fears of second wave

Sign up to our free money newsletter for investment analysis and expert advice to help you build wealth Sign up to our free money email for help building your wealth Sign up to our free money email for help building your wealth SIGN UP I would like to be emailed about offers, events and updates from The Independent. “The regulator is clearly worried about debt companies using misleading marketing and pushy tactics to keep customers in high-cost debt,” warns Laura Suter, personal finance analyst at AJ Bell, commenting on the FCA’s launch of a review into the heavy-handed tactics of high-cost lenders. “With debt levels set to spiral amid the end of the furlough scheme and a spike in unemployment, the FCA has warned that some high-cost lenders are acting irresponsibly by continuing to lend money to those already in debt who have no way out.” Any crackdown on these practices would be good news for consumers at a time when many find themselves in spiralling debt. Whether they’ve missed payments because the pandemic has blindsided them, prematurely taken payment holidays or fallen foul of lending assessments, the result is that millions of people could now be paying through the nose for decades to come because lenders have decided they’re financially unreliable. The worst affected could face up to £2,690 a year in higher levels of interest, warns money site Credit Karma UK, with the extra costs still coming in years after the Covid crisis passes.