How are building societies responding to Covid-19
Building societies and credit unions have stepped up, alongside other lenders, to offer their borrowers three month mortgage payment holidays if needed, says BSA | PA Images
Building societies and credit unions are working hard to serve their members at this time and to keep everyone safe.
Building societies and credit unions play an important role in many people’s lives. Whether that’s helping them save, providing them with a mortgage, or reassuring them and providing assistance at this difficult time, they are important in people’s financial lives. This week, the Economic Secretary to the Treasury, John Glen MP, wrote to front line staff providing essential banking services to thank them for their work during Covid-19.
With over 25 million members across the UK, these mutual businesses are owned by their customers – also known as members. Being owned by members means that decisions are made for the benefit of customers, not shareholders.
Building societies and credit unions have stepped up, alongside other lenders, to offer their borrowers three month mortgage payment holidays if needed. Around a quarter of a million have been given by the sector so far. There are other options available if a payment holiday, which defers payments, is not the best option for an individual.
A three month mortgage payment holiday is also available to buy-to-let landlords in the private sector where tenants have lost their jobs or seen their income reduced and need their landlords help. The payment holiday is given by the lender in the expectation that the landlord will help their tenants. On top of this we welcomed the three month moratorium on residential and buy-to-let possession action that is helping to reassure people that they will not lose their home at this difficult time.
Three month extensions have also been applied to all mortgage offers for those who have found their dream home, exchanged contracts, but have now seen their planned move put on hold for the time being. Additional Government guidance on moving or selling is available.
Maintaining access to our money is essential for regular activities, such as shopping for food or getting vital medicines.
For those who have card payment options (especially contactless), access to a branch is not needed. Instead, they should stay at home and use online access or phone a call centre if they have a query or concern. BSA members are redeploying branch staff to respond to the increased number of such queries.
But for people who rely on cash, branch access is critical. Building societies, credit unions and others are working closely with the Financial Conduct Authority and HM Treasury to maintain branch access for essential services, especially for vulnerable consumers. Around 90% of building society branches remain open with the safety of customers and staff the paramount consideration.
Across the sector we have seen a range of approaches to maintain appropriate social distance. The one in, one out approach, making a phone call to place an order for cash, and an appointment only service have all been introduced to facilitate safe access to essential services. This in the face of staff absence because of coronavirus running at around 30%. Branch hours do change and a full list of BSA members is online, with links to their Covid-19 information.
Sadly, criminals are using the coronavirus to target people to steal their money by ever more creative means.
Scams so far include fraudsters claiming to be from a building society and dealing with coronavirus-related issues that require customers to respond by paying money or providing personal information that will allow them to access the account. These scams are happening through email, telephone and text message. They often put people under pressure to stop them from thinking about whether what they are being asked to do is reasonable.
To be clear, BSA members make it clear to their customers that they will never:
- Ask you to disclose your PIN number or other passwords for your accounts
- Encourage you to move funds from your own account into a different “safe” account
- Encourage you to order and pay for UK cash via the phone or internet.
- Charge up-front fees for repayment holidays
- Make home visits to collect mortgage arrears on your doorstep
- Demand an immediate payment of mortgage arrears over the phone
- Demand payment of mortgage arrears via email providing you with a link through which to make payments.
There is more information on the Take Five campaign website. The campaign encourages people to take five to think about what they are being asked to do by potential fraudsters.
Building societies and credit unions are working hard to serve their members at this time and to keep everyone safe. But they can’t do it alone. Everyone has a role to play: whether that’s taking five to help protect themselves from fraud or only coming into branch when it’s really necessary.