Consumer Duty for consumer credit firms is now an evidence question. The FCA does not simply expect a lender, broker or debt firm to have a Duty policy. It expects the firm to understand whether customers receive good outcomes, identify where those outcomes are weaker and act before poor practices become systemic.
That expectation is particularly visible in 2026. The FCA's Consumer Finance Regulatory Priorities focus on access to credit that meets customer needs, support for consumers who struggle with debt and effective complaints and redress. The regulator is also becoming more data led through product sales data and returns such as CCR009, while its July 2026 outcomes-monitoring work emphasises that collecting metrics is not enough without interpretation and action.
Consumer credit is diverse, so Consumer Duty should not be applied through one template. A lender, credit broker, debt collector and debt adviser can all sit within the same broad sector while influencing very different parts of the customer journey. The firm's framework should therefore begin with its role, products and customer relationships.
Products and services should reflect the customers the firm actually serves
The products and services outcome requires firms within scope to identify a target market and ensure products and services are designed to meet the needs, characteristics and objectives of that market. For a lender, that should connect with product design, creditworthiness and affordability. For a broker, it should connect with the credit products and lenders to which customers are introduced and the nature of the service being provided.
The target market should be useful enough to change decisions. Describing a product as suitable for "UK adults seeking credit" provides little control if the pricing, term, fees or eligibility criteria make the product appropriate only for a narrower group.
Actual distribution should then be tested against the design. If a lender sees materially weaker outcomes among one customer segment, it should understand whether the product is being used in circumstances not anticipated at launch. A broker should similarly understand whether its referral model is reaching customers for whom the available credit products are appropriate.
The FCA's current direction is not to prevent firms from serving higher-risk or underserved customers. Its Consumer Finance priorities explicitly discuss access and innovation. The regulatory expectation is that firms understand the trade-offs and remain responsible for the outcomes created by the products they choose to offer.
Responsible lending and foreseeable harm should be considered together
CONC 5 contains the creditworthiness framework for regulated consumer credit agreements. For lenders, the assessment needs to consider the risk that the customer will not make repayments when due and the risk to the customer of not being able to make repayments without adverse consequences.
Consumer Duty adds a broader outcomes lens. A product can pass a technical creditworthiness process while aspects of the design, limit management or customer journey still create foreseeable harm.
The firm should therefore consider how credit decisions interact with repeat borrowing, limit increases, multiple products, customer vulnerability and financial difficulty. Automated models can improve consistency, but management should understand what data they use, where overrides occur and whether outcome monitoring identifies customer groups experiencing persistent harm.
Brokers have a different role. They should pay due regard to customer needs and circumstances when making explanations, recommendations or other relevant communications and should not treat lender acceptance as evidence that the broker's own service has delivered a good outcome.
The strongest framework therefore separates each firm's regulatory responsibility while allowing relevant customer information to move accurately through the distribution chain.
Price and value needs more than competitor benchmarking
Consumer credit pricing can include interest, arrangement fees, default charges, subscription or membership costs, broker fees and other charges depending on the product. A fair value assessment should consider the total customer price relative to the benefits and quality of the product or service.
Benchmarking can provide useful context, but the FCA's current Consumer Duty material makes clear that comparison with competitors is not enough by itself. A market in which several firms charge similar prices can still contain poor value.
The firm should understand what customers receive for the price and whether particular groups receive materially different value. A late-payment fee, for example, can have a different effect on customers who rarely incur it and customers whose circumstances mean they pay it repeatedly.
Distribution matters too. Where a broker or intermediary adds material cost, the relevant firms should understand how that affects the overall customer proposition.
Fair value monitoring should be ongoing and risk based. Firms should avoid inventing a universal annual reassessment rule where the current Handbook does not require one. The correct framework is to monitor outcomes and review value when evidence, product change or risk warrants it.
Consumer understanding is central to digital credit journeys
Consumer credit is often sold through fast digital journeys, which can make timing and presentation as important as the wording itself. Customers may move from marketing to eligibility, price, agreement and payment within minutes.
The consumer understanding outcome requires firms to support customers in making informed decisions. That means identifying which information matters at each stage and ensuring it appears early enough to influence the decision.
APR, total cost, fees, repayment timing, consequences of missed payments and the nature of the broker's service can each be material. A technically complete disclosure delivered after the customer is psychologically committed may not provide the same outcome as clear information earlier in the journey.
The FCA's 2026 consumer understanding work emphasises design, testing, monitoring and governance. Credit firms should therefore use evidence such as customer testing, complaints, call or chat analysis, journey drop-off and recurring questions to assess whether communications work.
CP26/15 proposed changes to CONC 3 financial promotions should be treated as consultation material rather than current law until final rules are made. The existing CONC 3 requirements remain relevant in the meantime.
Customers in financial difficulty are a core 2026 priority
The FCA's Consumer Finance Regulatory Priorities make support for customers struggling with debt one of the sector's three headline priorities. Current CONC 7 rules require firms to treat customers in or approaching arrears or default with forbearance and due consideration, taking account of individual circumstances.
Consumer Duty reinforces the expectation of early and effective support. Firms should not wait for a customer to miss several payments if the customer has already indicated a real risk that they will be unable to pay when due.
The support framework should be practical. Customers should be able to contact the firm, explain their circumstances, understand available options and receive a solution that reflects what they can reasonably afford.
Income and expenditure assessment should be objective where used, and communications should be clear and understandable. The firm should also signpost to free, impartial debt advice where appropriate.
Outcome monitoring should then test whether arrangements are sustainable and whether customers repeatedly return to difficulty. The number of payment plans created is an activity measure. The more useful question is whether the plan helped the customer move towards a better outcome.
Vulnerability should change support where it matters
Consumer credit customers can be vulnerable because of health, life events, low resilience or capability. Those characteristics can be particularly relevant where a customer is already struggling with debt.
The firm should identify support needs proportionately and record enough information to deliver the appropriate adjustment without collecting unnecessary sensitive data. The FCA and ICO's 2026 joint statement confirms that data protection law and the Consumer Duty can operate together.
Vulnerability should not become a label with no operational effect. If a customer needs more time, a different channel, written follow-up or support from a trusted person, the process should allow it where appropriate.
The firm should then monitor whether customers in vulnerable circumstances receive materially different outcomes. Complaint rates, failed payment plans, repeat contacts and customer feedback can reveal where the support model is weaker.
Brokers and ARs need role-specific Consumer Duty controls
Credit brokers can influence customer outcomes before the lender makes any decision. Promotions, lead generation, explanations, lender panels, fees and referral practices can each affect what the customer understands and which product they reach.
The FCA's May 2026 regulatory guide for credit brokers is particularly useful for smaller firms because it brings together expectations across marketing, customer treatment, complaints, updating the FCA and AR relationships. It does not replace the Handbook, but it provides a practical benchmark for how the FCA expects brokers to operate.
Principal firms should also be able to distinguish outcomes across ARs. A network-wide average can hide one AR with poor promotions, high fees or repeated complaints.
Consumer Duty should therefore feed AR risk ratings and monitoring rather than remain a principal-level board exercise detached from the businesses actually dealing with customers.
Outcomes monitoring should lead to decisions
The FCA's July 2026 work on outcomes monitoring is clear that firms need to assess, test, understand and evidence customer outcomes. The right data depends on the business.
A lender may consider credit performance, repeat borrowing, financial difficulty, fees, complaints and support outcomes. A broker may place more weight on customer understanding, lender distribution, fees and complaints. Debt firms will have different indicators again.
The critical point is interpretation. Management should know what a metric means, what standard is expected and what action is triggered when the result deteriorates.
Segmentation should be used where it can reveal meaningful differences. An overall complaint rate can look acceptable while one product, AR or customer group performs materially worse.
The annual governing-body assessment should then summarise and challenge this evidence rather than create it. A board report cannot compensate for weak underlying monitoring.
What should consumer credit firms prioritise in 2026?
Firms should review their Consumer Duty framework against the FCA's current Consumer Finance priorities and the evidence generated by their own business. Responsible access, financial difficulty and complaints are clear sector themes, while data quality and AR oversight are increasingly important supervisory tools.
Management should also distinguish final rules from consultations. CP26/15 and CP26/23 contain potentially significant proposals, but they should not be treated as the current rulebook until the FCA makes final changes.
The strongest Duty framework is therefore not the one with the most templates. It is the one that allows the firm to identify a poor customer outcome, understand its cause, change the product or process and demonstrate through subsequent evidence that the outcome improved.
How Regulatory Counsel can support
Regulatory Counsel supports consumer credit lenders, brokers and principal firms with Consumer Duty, fair value, customer journey reviews, financial difficulty, AR oversight, outcomes monitoring and remediation.
We can review the full framework or a specific product, distribution channel or Consumer Duty outcome.
Speak to Regulatory Counsel to discuss Consumer Duty support for a consumer credit firm.
Frequently Asked Questions
It applies to relevant retail market business within the Duty's scope, alongside CONC and other applicable requirements. Firms should assess their role and customer relationships rather than assume every obligation applies identically across the sector.
No. CONC remains the detailed consumer credit sourcebook. Consumer Duty operates alongside it and adds a broader outcomes framework.
Firms should monitor value and review it appropriately when risk, product changes or evidence require. Firms should not invent a universal annual reassessment requirement where the current rules do not impose one.
The appropriate data depends on the business, but can include credit performance, complaints, fees, support outcomes, repeat borrowing, customer understanding, vulnerability and AR information.
Yes. We can assess products and services, fair value, customer understanding, support, outcomes monitoring and governance.