National debt charity Consumer Credit Counselling Service (CCCS) has welcomed the policy measures announced by the FSA that are designed to protect people with mortgage arrears or entering sale and rent back (SRB) agreements.

The FSA’s new rules state that firms must not apply monthly charges where an agreement is already in place to repay arrears, that payments by customers must be used to settle missed monthly payments first and that lenders must consider all options before seeking to repossess a person’s home.

The FSA additionally proposed a ban on the use of emotive advertising, cold calling and high-pressure sales techniques by sale and rent back (SRB) firms, as well as a 14-day cooling-off period and guaranteed five year tenancy for people entering SRB agreements.

CCCS chairman Malcolm Hurlston said: “The FSA’s action against arrears penalties will help borrowers to tackle their debts more fairly and effectively. It is good to see measures that further entrench repossession as a last resort among lenders