The FCA has published CP 25/23 to consult on its approach to regulated Deferred Payment Credit lending, which is now in FCA’s regulatory perimeter following legislative change.
The consultation, which closes on 26 September, covers rules relating to information provision, creditworthiness assessments, dispute resolution and data reporting.
Key consultation points include:
- that firms within the new perimeter will be subject to the Consumer Duty and have to deliver against their obligations under it – and, as a result, the consumer understanding and support outcomes will be core to the FCA’s approach to regulation;
- looking at the CONC chapters and rules that are relevant to DPC activities (specifically, 1, 2 (where appropriate to the business model), 3 and 6;
- new rules to require pre-contractual disclosures, what must be communicated to customers when they miss a repayment and guidance to remind firms of their obligations under the Duty – the FCA says some of these rules are particularly needed because, for example, its 2024 data shows that nearly one quarter of DPC customers did not know they would have to pay a fee if they missed a repayment. The rules will be bespoke to DPC agreements, but flexibility in how information is provided;
- new rules on what information must be provided during the agreement;
- proposals for communications to customers who have missed repayments or are in financial difficulty;
- how DPC lenders should assess creditworthiness – applying the existing rules and guidance in CONC 5.2A, including looking at repeat borrowers. And the FCA proposes to apply the same requirements to all agreements, including agreements which are “small” agreements for CCA purposes;
- generally applying all appropriate parts of the Handbook, including the threshold conditions, SYSC and the SMCR;
- what regulatory reporting will be required;
- applying all the DISP complaint handling rules and bringing DPC complaints within the FOS’ compulsory jurisdiction;
- DPC activities will stay outside FSCS scope as current consumer credit activities are; and
- eligibility for, and timing and conditions of, the TPR.
The consultation includes draft Handbook text, amending the Glossary, SYSC, GEN, SUP, DISP and CONC.
The FCA has indicated that final rules should be published in early 2026, with regulation coming into force on 15 July 2026.