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Citizens Advice response to the FSA’s improved package of measures for mortgage holders

26 January 2010

Head of Consumer Policy Sue Edwards said:

"We are very pleased with today’s FSA proposals which strengthen existing rules on how lenders handle mortgage arrears. In December 2009 we published a report* which found that whilst recent Government packages for supporting homeowners were making a difference, in a third of recorded cases lenders had failed to comply with new rules requiring them to take court action only as a last resort after offering borrowers other options for dealing with their arrears.

"In particular we welcome the clarification that lenders must not apply monthly arrears charges where they and the borrower have agreed repayment arrangements; that the FSA compel lenders to consider all options before repossessing and the confirmation that arrears payments made by borrowers must be allocated to clearing missed monthly payments first, before they pay off charges.

"The strengthening of these existing rules will help protect vulnerable homeowners from avoidable homelessness and we hope to see them implemented as soon as possible."

*Turning the tide?

Notes to editors

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see New windowwww.adviceguide.org.uk
  3. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2010 to March 2011. For full 2010/2011 service statistics see: www.citizensadvice.org.uk/press_statistics
  4. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
  5. Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.