Context
The FCA has published Consultation Paper CP26/15, consulting on proposed changes to simplify the financial promotions rules in CONC 3, and opening a discussion on ways to improve how cost of credit information is presented to consumers. The Discussion Paper forms Chapter 4 of the Consultation Paper. The aim is to review whether the use and concept of APRs help consumers understand borrowing costs and is seeking views on whether it should change how these are communicated in credit advertising.
Alongside the Consultation, the FCA has published a Research Note and Annex titled “Navigating the Disclosure Trade-off: Balancing Flexibility and Standardisation in Cost-of-Credit Information”, and a consumer research Insight Report from Price Waterhouse Coopers (PwC) on “Consumer Credit Act Reform”.
Key points to note and next actions
- Published research shows APRs are useful for comparing products, but additional information like total repayment figures can also help consumer understanding. However, providing different information tailored to different products can sometimes make comparison harder and confusing.
- The FCA wants to remove provisions in CONC 3 which may be overly prescriptive or outdated. Instead, it would rely on firms delivering the Duty’s consumer understanding outcome to ensure their communications meet consumers’ information needs and are likely to be understood. These aim to remove duplication and outdated requirements where the Consumer Duty already sets clear expectations for firms to support consumer understanding.
- The FCA is also exploring ways to improve how firms communicate APR and other credit costs to help retail customers better understand and make informed financial decisions.
- Chapter 3 of the Consultation sets out which parts of CONC 3 the FCA is planning to remove, and for a good number of these elements there is a table demonstrating overlap with the Consumer Duty. We recommend that Compliance staff take note of the useful wording of some of the CONC rules and guidance which the FCA is proposing to remove.
- Certain parts of CONC 3 are not in scope of this review, so will remain in place and unchanged, including:
- CONC 3.4 – Risk warnings for high-cost short-term credit;
- CONC 3.7 – Financial Promotions and Communications: credit brokers;
- CONC 3.9 – Financial promotions and communications: debt counsellors and debt adjusters (except for the proposal to relocate some parts of CONC 3.3.10G to this chapter)
- The Discussion Paper, which is set out at Chapter 4 of the Consultation Paper, focuses on:
- the extent to which disclosure of the Representative APR supports consumer understanding of the cost of the credit and what alternatives might be considered;
- whether the mandatory inclusion of a representative example when triggered supports consumer understanding; and
- whether the current 51% threshold for determining a Representative APR remains appropriate.
- The Discussion and Consultation close on 17th June 2026. Firms can respond by completing the FCA’s online form or in writing to: Consumer Finance Policy Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN. E-mail: cp26-15@fca.org.uk.