Scope and regulatory sources
Forbearance means considering a proportionate change or accommodation for a consumer in or approaching repayment difficulty rather than treating escalation as inevitable. In the UK, FCA CONC 7.3.4R requires regulated firms within its scope to treat customers in or approaching arrears or in default with forbearance and due consideration. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
Assessing financial difficulty
Begin with verified repayment obligations, amounts overdue, remaining balance, existing concessions and customer explanations. A disputed charge or unallocated transfer should first be resolved as an account issue; do not treat a potentially incorrect balance as proof of lack of money. Audit a sample of actual customer cases rather than relying only on a policy. Compare the information available at the time with the option offered and inspect notices and account movements afterward. Pay particular attention to whether automated recovery action continued after a forbearance decision. Supervisory evidence should show consistent routing, clear explanations and a reasoned outcome, without treating consistency as a reason to ignore different personal circumstances. A short review memo can identify the responsible staff member, applicable rule, exception and follow-up date.
Designing repayment arrangements
UK CONC 7.3 requires relevant regulated firms to provide forbearance and due consideration. Its examples include an arrangement allowing a reasonable period to repay debt and reduced or token payments in suitable cases. A lender should not represent its own standard repayment term as a universal statutory rule. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
Preparing for changes to EU law
In the EU, Article 35 of Directive (EU) 2023/2225 provides a revised forbearance framework, with national measures generally applicable from 20 November 2026. It is separate from the UK's established CONC framework. The Directive requires appropriate reasonable measures before enforcement but does not mandate the same option in every case. Audit a sample of actual customer cases rather than relying only on a policy. Compare the information available at the time with the option offered and inspect notices and account movements afterward. Pay particular attention to whether automated recovery action continued after a forbearance decision. Supervisory evidence should show consistent routing, clear explanations and a reasoned outcome, without treating consistency as a reason to ignore different personal circumstances. A short review memo can identify the responsible staff member, applicable rule, exception and follow-up date.
Frequently asked questions
Must the lender offer every type of forbearance?
No. The appropriate response depends on the circumstances and applicable rules.
When do revised CCD2 national provisions generally apply?
From 20 November 2026, subject to relevant national implementing measures and transitions.
Primary sources
FCA Handbook CONC 7.3 ↗Directive (EU) 2023/2225 ↗Read the source in its current version. National implementing measures and product-specific applicability may require additional research.
Related research
Forbearance Requirements in Consumer Lending ↗