Professional & Financial Services

Meet pre-contract disclosure requirements for credit

How to provide the required pre-contract information to borrowers before entering a consumer credit agreement. Covers the SECCI form, adequate explanations duty, creditworthiness assessments, APR disclosure, and agreement execution requirements.

UK-wide
Guide summary

You must give customers a standard credit information form (SECCI) before they sign a credit agreement. Explain the terms clearly and check they can afford the repayments. The law requires this for loans, credit cards, and other credit products.

  • Give customers the SECCI form before signing
  • Include the total cost, APR, and repayment schedule
  • Explain the terms clearly in simple language
  • Check if the customer can afford the repayments
  • Assess their income and regular expenses
  • Customers have 14 days to cancel the agreement
  • Agreements can be unenforceable if rules are not followed
  • Rules apply to loans, credit cards, hire purchase, and overdrafts
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UK-wide

Related guides in Financial Regulation Overview

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.

Comply with pre-contract disclosure step by step

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    1. Provide the Standard European Consumer Credit Information (SECCI) form

    For most regulated credit agreements, you must give the borrower a completed SECCI form before the agreement is entered into. The SECCI is a standardised document prescribed by the Consumer Credit (Disclosure of Information) Regulations 2010. It must include: the type of credit, the total amount of credit, the duration of the agreement, the borrowing rate and whether it is fixed or variable, the representative APR, the total amount payable, the amount and frequency of instalments, any fees or charges, the consequences of missed payments, and the right of withdrawal. You must use the prescribed format. Providing this information in a different layout or in a separate document does not satisfy the requirement.

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    2. Give the borrower an adequate explanation

    Section 55A of the CCA requires you to provide the borrower with an adequate explanation of the credit being offered. This goes beyond simply handing over the SECCI. You must explain: the features of the agreement that may make it unsuitable for particular types of use, how much the borrower will have to pay periodically and in total, the features that may have a significant adverse effect on the borrower, and the consequences of failing to make payments on time. The explanation must be given in a way and at a level that enables the borrower to assess whether the agreement is suited to their needs and financial situation. For online applications, this may be achieved through interactive tools, prominent summaries, or worked examples.

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    3. Assess the borrower's creditworthiness

    Before entering the agreement, you must assess whether the borrower can afford the credit. CONC 5 requires a reasonable assessment of creditworthiness, taking into account the borrower's ability to make repayments as they fall due over the life of the agreement without significant adverse impact on their financial situation. This is not the same as a credit score check alone. You must consider income, committed expenditure, and other financial commitments. The level of assessment should be proportionate to the amount and duration of the credit.

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.

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.

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    4. Prepare the agreement with all prescribed terms

    The agreement must contain all prescribed terms set out in the Consumer Credit (Agreements) Regulations 2010. These include the names and addresses of the parties, the amount of credit, the credit limit (for running-account credit), the duration, the rate of interest, the total charge for credit, the total amount payable, the timing and amounts of repayments, any security required, and details of the borrower's cancellation and withdrawal rights. Missing any prescribed term can render the agreement improperly executed.

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    5. Obtain the borrower's signature

    The borrower must sign the agreement in the prescribed manner. For paper agreements, this means a physical signature in a signature box that is clearly separate from the terms. For electronic agreements, you must use a method that reliably identifies the borrower and indicates their assent to the terms. The agreement must be presented as a single document (or set of documents) that the borrower can read before signing.

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    6. Provide copies of the executed agreement

    After execution, you must provide the borrower with a copy of the agreement. If the agreement was signed by the borrower and the creditor at the same time, one copy is sufficient. If there was a delay between the borrower signing and the creditor executing the agreement (for example, where credit approval follows the borrower's application), you must provide a copy within seven days of the creditor's execution. The borrower also has the right to request a copy at any time during the agreement (sections 77 to 79 of the CCA).

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    7. Allow the withdrawal period

    For most regulated credit agreements, the borrower has a 14-day right of withdrawal from the date of the agreement (section 66A of the CCA). You must inform the borrower of this right in the agreement. If the borrower exercises the right, they must repay the credit drawn down plus any accrued interest within 30 days, but no other charges apply.

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.

Official guidance on pre-contract requirements

Authoritative sources for pre-contract disclosure compliance.