Process Mail Frequently To Help Vulnerable, FCA Tells Cos.

By Najiyya Budaly
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Law360, London (May 13, 2020, 4:03 PM BST) -- The Financial Conduct Authority set out guidelines on Wednesday for finance companies on how to handle paper documents during the coronavirus crisis, instructing banks and insurers to frequently process mail and keep on top of requests from vulnerable customers.

Financial institutions must ensure that consumers are not left at a disadvantage and unable to use services if they do not have internet access, the City watchdog said.

The COVID-19 outbreak makes it harder for companies to process paper documents, but they must protect vulnerable customers and ensure that they contact those who do not use online services, the FCA said. Lenders and insurers must ensure that they collect post and process paper-based applications as frequently as possible.

"While we understand that obligations for paper documents may be difficult to meet on usual timescales, and will show flexibility in how we approach such issues, we expect firms to send communications in a timely manner," the regulator said in guidance published Wednesday.

The FCA said the finance companies that cannot comply with postal and paper-based applications should notify it.

The regulator said it expects businesses to provide customers with regulator updates on how they are processing incoming and outgoing post and checks. They must also guide consumers on how to check their financial statements.

The FCA said it expects companies to provide retrospective cover if a customer has paid for a service, including insurance, through a check that the business has not yet processed.

"We expect firms to consider the potential harm caused by not being able to cash the check on a case-by-case basis," the watchdog said.

The watchdog has relaxed rules for finance companies amid the pandemic, including allowing banks to use "selfies" to verify the identity of their customers. It has said that it is allowing leeway on investment rules to ensure that businesses can cope with the economic fallout from the spread of COVID-19.

--Editing by Ed Harris.

For a reprint of this article, please contact reprints@law360.com.

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