Meet pre-contract disclosure requirements for credit

Before a consumer enters into a credit agreement, you must provide them with specific information in a prescribed format. These pre-contract disclosure requirements ensure borrowers can make informed decisions and compare credit products on a like-for-like basis.

Getting pre-contract disclosure right is not optional. Failure to provide the required information, or providing it in the wrong format, can make your credit agreement unenforceable. The FCA treats pre-contract failures as a serious compliance issue, and the Financial Ombudsman Service regularly upholds complaints where lenders failed to provide adequate pre-contract information.

When these requirements apply

Pre-contract disclosure requirements apply to all regulated credit agreements. This includes personal loans, credit cards, hire purchase, conditional sale agreements, overdrafts, and (from 15 July 2026) Buy Now Pay Later products. The requirements apply whether credit is provided face-to-face, by telephone, online, or through an intermediary.

Pre-contract information and SECCI form requirements

Requirements for pre-contractual disclosure to consumers under the Consumer Credit (Disclosure of Information) Regulations 2010, including the Standard European Consumer Credit Information (SECCI) form and the adequate explanations duty under s.55A CCA 1974.

Before a consumer enters into a regulated credit agreement, the creditor must provide pre-contract information using the Standard European Consumer Credit Information (SECCI) form. This is a standardised document prescribed by the Consumer Credit (Disclosure of Information) Regulations 2010 (SI 2010/1013). The creditor must also comply with the adequate explanations duty under s.55A of the Consumer Credit Act 1974, ensuring the consumer can make an informed decision.

SECCI form requirement: Must be provided in writing or another durable medium before the agreement is made, in good time for the consumer to consider the information
APR disclosure: The representative annual percentage rate of charge must be stated prominently on the SECCI form
Total amount payable: The total amount the consumer will pay over the full term, including all interest and charges, must be clearly stated
Repayment schedule: The amount, number, and frequency of repayments must be specified, along with the order in which payments are allocated
Right of withdrawal: The SECCI must inform the consumer of their 14-day right of withdrawal under s.66A CCA 1974
Adequate explanations duty (s.55A): The creditor must provide an adequate explanation of the matters referred to in s.55A(2) to enable the debtor to assess whether the agreement is suitable for their needs and financial situation
Timing of SECCI: Must be provided before the agreement is entered into, giving the consumer adequate time to compare products and consider the information
Durable medium: Information must be provided on paper or another durable medium (including email or PDF) that allows the consumer to store and retrieve it unchanged

Consumer Credit (Disclosure of Information) Regulations 2010

Comply with pre-contract disclosure step by step

Affordability and creditworthiness assessment requirements (CONC 5)

FCA responsible lending requirements under CONC 5, including income verification, expenditure analysis, credit reference data checks, proportionality, and vulnerable customer considerations.

Under CONC 5 of the FCA Handbook, all firms offering regulated consumer credit must carry out a reasonable assessment of the borrower's creditworthiness before entering into a credit agreement. The assessment must consider both the risk that the borrower cannot repay (credit risk) and the risk that the borrower will experience adverse consequences from repaying (affordability risk). The depth of the assessment must be proportionate to the amount of credit and the risk to the borrower.

Dual assessment requirement (CONC 5.2A.4R): Must assess both credit risk (ability to repay) and affordability risk (ability to repay without adverse consequences such as financial difficulty)
Income verification: Must take reasonable steps to verify income using payslips, bank statements, tax returns, or other reliable evidence. The level of verification must be proportionate to the credit risk.
Expenditure analysis: Must assess the borrower's committed and essential expenditure to determine the amount of disposable income available for credit repayments. Statistical data alone is insufficient for higher-risk lending.
Credit reference data: Must obtain and consider credit reference agency (CRA) data for most regulated credit agreements. CRA data must be recent and should include data from at least one CRA.
Proportionality principle: The scope and depth of assessment must be proportionate to factors including the amount of credit, cost of credit, borrower circumstances, and risk of financial difficulty
Vulnerable customers (CONC 5.2A.15G): Firms must have regard to the needs of vulnerable customers, including those with mental health conditions, low financial resilience, or recent life events such as bereavement or job loss
Documentation retention: Records of creditworthiness assessments must be retained for the duration of the agreement plus a reasonable period thereafter (FCA expects minimum 3 years after agreement ends)
Consumer Duty interaction (PS22/9): Affordability assessment forms part of the firm's obligation to deliver good outcomes for customers under the FCA Consumer Duty

FCA CONC 5 - Responsible lending

APR calculation and disclosure

The Annual Percentage Rate (APR) is the standardised measure of the total cost of credit. It allows borrowers to compare products from different providers on a consistent basis. You must calculate and disclose the APR correctly in both pre-contract documents and the credit agreement itself.

APR calculation and representative APR disclosure requirements

Annual percentage rate (APR) calculation methodology under the Consumer Credit (Total Charge for Credit) Regulations 2010 and representative APR requirements for consumer credit advertising.

The annual percentage rate of charge (APR) is the standardised measure of the total cost of credit to the consumer, expressed as a yearly rate. It is calculated in accordance with the Consumer Credit (Total Charge for Credit) Regulations 2010 (SI 2010/1011) and must be disclosed in all credit advertisements and pre-contract information. The APR calculation uses an equation of equivalence based on the total charge for credit, enabling consumers to compare credit products on a like-for-like basis.

Calculation basis: Uses an actuarial equation of equivalence where the present value of drawdowns equals the present value of all repayments and charges, solved for the annual rate
Total charge for credit - included: Interest, fixed fees, arrangement fees, credit broking fees, compulsory insurance premiums, and any other charges the borrower must pay as a condition of obtaining the credit
Total charge for credit - excluded: Default charges, charges for non-compliance, charges the borrower would pay regardless of the credit (such as land registry fees), and notarial fees
Representative APR (CONC 3.5.5R): An advertised APR is representative only if the firm reasonably expects that at least 51% of borrowers responding to the advertisement will receive that rate or a lower one
Prominence requirement: The representative APR must be displayed more prominently than any other rate or cost information in an advertisement. It must be accompanied by the phrase "representative" or "representative APR".
Trigger information: If any of the following is stated in an advertisement, the representative APR must also be shown - the rate of interest, any other cost of credit, the number or frequency of repayments, or the duration of the credit
Decimal precision: APR must be expressed to at least one decimal place (e.g. 19.9% APR representative)

Consumer Credit (Total Charge for Credit) Regulations 2010

Executing the credit agreement

Once pre-contract information has been provided and the borrower wishes to proceed, the credit agreement must be properly executed. The CCA and the Consumer Credit (Agreements) Regulations 2010 set strict requirements for the form and content of credit agreements.

Credit agreement proper execution requirements (s.60-65 CCA 1974)

Requirements for the proper execution of regulated consumer credit agreements, including prescribed terms, signature, copy requirements, and consequences of improper execution.

Regulated consumer credit agreements must be properly executed to be enforceable. Sections 60 to 65 of the Consumer Credit Act 1974 and the Consumer Credit (Agreements) Regulations 2010 (SI 2010/1014) prescribe the form and content of agreements, signature requirements, and copy obligations. An improperly executed agreement can only be enforced with a court order, and in some cases may be wholly unenforceable.

Form and content (s.60-61): The agreement must contain all prescribed terms and information set out in the Consumer Credit (Agreements) Regulations 2010, presented in a clear and legible manner
Prescribed terms (Schedule 1, SI 2010/1014): Must include the amount of credit or credit limit, rate of interest, APR, total amount payable, timing and amounts of repayments, and any security provided
Signature requirements (s.61(1)): The agreement must be signed by the debtor and by or on behalf of the creditor. The document signed by the debtor must contain all prescribed terms and conform to regulations.
Signature box: The debtor's signature must be within a signature box that includes prescribed statements about the debtor's rights, including the right of withdrawal
Copy at signing (s.62): If the agreement is presented personally for signature, the debtor must receive a copy of the executed agreement there and then
Posted copy (s.63): If the agreement is not signed by both parties at the same time, a copy of the executed agreement must be sent to the debtor within 7 days of the agreement being made
Improper execution - consequences (s.65): An improperly executed regulated agreement is enforceable against the debtor only on an order of the court. The court has discretion to make an enforcement order if it considers it just to do so.
Irredeemable unenforceability: If an agreement does not contain all prescribed terms, it is irredeemably unenforceable under s.127(3) (for agreements made before 6 April 2007) or subject to court discretion (for later agreements)

Consumer Credit Act 1974 - Proper execution (s.60)

Common compliance failures

The FCA and Financial Ombudsman Service regularly identify the following pre-contract compliance failures:

SECCI not provided or provided too late: The SECCI must be given before the agreement is entered into, with sufficient time for the borrower to consider it. Providing it at the point of signature is too late
Inadequate explanation: Simply referring the borrower to the terms and conditions does not satisfy the section 55A duty. The explanation must be tailored and meaningful
Affordability assessment too superficial: Relying solely on a credit score without considering income and expenditure fails to meet CONC 5 requirements
APR calculated incorrectly: Failing to include all charges in the total charge for credit, or using the wrong calculation methodology
Missing prescribed terms: Omitting required terms from the agreement, which can make it unenforceable without a court order
Copy not provided within time: Failing to send the borrower a copy of the executed agreement within seven days when required

Consequences of getting it wrong

Improperly executed credit agreements are not automatically void, but they are unenforceable without a court order under section 127 of the CCA. This means you cannot take enforcement action (such as pursuing arrears through the courts) without first obtaining the court's permission. The court has discretion to refuse enforcement entirely if the defect is sufficiently serious or if enforcement would be unjust.

The FCA can also take supervisory and enforcement action for systematic pre-contract failures, including fines, requirements for customer redress, and restrictions on your permissions.

What to do next

Audit your current pre-contract process against each requirement above. Ensure your systems generate compliant SECCI forms, that your staff understand the adequate explanation duty, and that your agreement templates contain all prescribed terms. Consider obtaining specialist legal review if you have not done so recently.

For advertising requirements, see Comply with credit advertising rules
For debt collection compliance, see Comply with debt collection rules
For an overview of the regulatory framework, see Understanding UK consumer credit regulation

Official guidance on pre-contract requirements

Authoritative sources for pre-contract disclosure compliance.

CONC 4: Pre-contractual requirements
FCA rules on pre-contract disclosure and adequate explanations.
FCA Handbook
CONC 5: Responsible lending
FCA rules on creditworthiness assessment and affordability.
FCA Handbook
Consumer Credit (Disclosure of Information) Regulations 2010
Statutory requirements for pre-contract information including the SECCI form.
legislation.gov.uk
Consumer Credit (Agreements) Regulations 2010
Prescribed form and content of credit agreements.
legislation.gov.uk
Consumer Credit (Total Charge for Credit) Regulations 2010
Rules for calculating APR and total charge for credit.
legislation.gov.uk

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Guvnor

Meet pre-contract disclosure requirements for credit

When these requirements apply

Comply with pre-contract disclosure step by step

APR calculation and disclosure

Executing the credit agreement

Common compliance failures

Consequences of getting it wrong

What to do next

Compliance Assistant

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When these requirements apply

Comply with pre-contract disclosure step by step

APR calculation and disclosure

Executing the credit agreement

Common compliance failures

Consequences of getting it wrong

What to do next

Related guides in Financial Regulation Overview

Business Context Testing

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