Journey

Start offering consumer credit to customers

End-to-end learning path for businesses new to consumer credit. Covers understanding FCA regulation, obtaining authorisation, setting up pre-contract disclosures and affordability assessments, complying with advertising rules, and verifying ongoing compliance under the Consumer Duty.

Retail & Consumer Goods Professional & Financial Services Starting a Business Updated 15 September 2026

6 milestones references 7 guides

Before you offer credit: what you need to know

If your business plans to offer credit, hire purchase, or deferred payment to consumers, you are entering one of the most heavily regulated areas of UK business. The FCA authorises and supervises all consumer credit activity, and operating without the correct permissions is a criminal offence.

This learning path takes you from understanding the regulatory framework through to verifying ongoing compliance.

Understand the regulatory landscape

UK consumer credit regulation rests on the Consumer Credit Act 1974 (CCA), which defines regulated credit agreements and consumer rights, and the Financial Services and Markets Act 2000 (FSMA), which gives the FCA its authorisation and supervisory powers. The FCA's Consumer Credit sourcebook (CONC) translates these into the practical rules you must follow.

Understanding this framework determines which permissions you need and what rights your customers have.

Understanding UK consumer credit regulation

What consumer credit regulation is, who it applies to, and how the CCA 1974, FSMA 2000, and FCA CONC rules work together.

Guv’s take

Do you actually need FCA authorisation? Not all credit arrangements are regulated. Business-to-business lending, some high-value agreements, and certain short-term interest-free arrangements may be exempt. The guide above helps you determine whether your activity falls within scope.
Get FCA authorisation

Once you have confirmed your activity is regulated, you must apply to the FCA for authorisation. The FCA assesses whether your business is fit and proper, including your financial resources, competence, and compliance plans. The process typically takes around 110 working days, so plan well ahead.

FCA authorisation fees for consumer credit

Application fees range from GBP 280 for limited permission to over GBP 11,000 for complex full-permission applications. You also pay annual periodic fees based on your consumer credit income. Understanding the cost structure helps you budget before committing.

CFO application fee

£280 (credit-related only)

Complex permissions fee

Up to £11,150

Annual periodic fees

Based on income from regulated activities - increased 2.3% for 2026/27

Variation fee

£250-£2,500 depending on complexity

RegData submission

Annual regulatory reporting required

FCA fees calculator (opens in a new tab)

FCA consumer credit authorisation

How to apply for FCA consumer credit authorisation, including permission types, the application process, timeline, and what the FCA assesses when deciding whether to approve your application.
Set up pre-contract processes

Before entering into any credit agreement, you must provide specific information in a prescribed format. The SECCI form must be given to every borrower before they sign, and you must adequately explain the key features, risks, and costs. Failure to comply can render agreements unenforceable.

Meet pre-contract disclosure requirements for credit

How to provide the required pre-contract information to borrowers, including the SECCI form, adequate explanations duty, agreement execution requirements, and the consequences of getting it wrong.
Set up affordability assessments

Before granting credit, you must assess whether the borrower can afford the repayments without financial hardship. The FCA expects assessments proportionate to the amount and type of credit, using reliable data including credit reference agencies. You must document your process and be able to demonstrate it to the FCA.

Affordability assessment requirements

CONC 5 requires creditworthiness assessment before entering into any regulated credit agreement: verifying income, assessing expenditure, checking credit references, and considering vulnerable borrowers. Assessment depth must be proportionate to the credit risk and amount.

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 (opens in a new tab)

Conduct affordability assessments for credit

How to conduct and document affordability assessments that meet FCA expectations, including income verification, expenditure analysis, credit reference checks, and the proportionality principle.
Comply with credit advertising rules

Credit advertising is tightly regulated under CONC 3 and the financial promotions regime. Any communication that invites someone to engage in credit activity is a financial promotion, whether on your website, social media, or in-store. Getting this wrong can result in FCA enforcement action.

Representative APR requirements

Including any interest rate, fee, or repayment amount in an advertisement triggers the requirement to show a representative APR. This must reflect the rate at which at least 51% of agreements are reasonably expected to be made, shown at least as prominently as any other rate in the advertisement.

Under the Consumer Credit (Advertisements) Regulations 2010 (SI 2010/1970) and FCA CONC 3, any advertisement for consumer credit that includes an interest rate, amount of any charge, or any amount relating to the cost of credit must also display the representative APR. The representative APR must be the rate that at least 51% of those who respond to the advertisement and enter into an agreement will be offered.

When any triggering information is included in an advertisement, all of the prescribed standard information must also be shown. The representative APR must be given greater prominence than any other rate of charge in the advertisement. These rules apply to all media, including social media posts, where character or space limitations do not exempt firms from showing the full triggered information.

51% rule

The representative APR must be a rate at which at least 51% of applicants who enter into an agreement would be offered credit

Triggering information

An interest rate, amount of any charge, or amount relating to the cost of credit (if any of these appear, all standard information must be shown)

Required standard information

The representative APR, the borrowing rate (fixed or variable), the total amount of credit, the duration of the agreement, the total amount payable, and the amount of each repayment

Prominence requirement

Representative APR must be shown more prominently than any other rate of charge stated in the advertisement

Social media

Full triggered information requirements apply even in limited-space media such as social media posts; firms cannot use character limits as a reason to omit required information

Exemptions

Advertisements that do not include any triggering information (i.e. no rate, charge, or cost of credit) need not include the representative APR

Regulation source

Consumer Credit (Advertisements) Regulations 2010 (SI 2010/1970), regs 4-5, and FCA CONC 3.5-3.6

FCA CONC 3 - Financial promotions and communications with customers (opens in a new tab)

Comply with credit advertising rules

How to advertise credit products compliantly, including representative APR requirements, triggered information, social media rules, risk warnings, and FCA financial promotions approval.
Verify your compliance and embed Consumer Duty

Obtaining authorisation is only the beginning. The FCA expects continuous compliance, regular self-assessments, and demonstrable good outcomes for customers under the Consumer Duty (Principle 12). Annual reviews, management information monitoring, and proactive identification of consumer harm are baseline expectations.

Consumer credit compliance checklist

Annual compliance verification checklist covering FCA permissions, CONC requirements, Consumer Duty, complaints handling, and regulatory reporting obligations.

FCA Consumer Duty for credit products

How the Consumer Duty applies specifically to consumer credit, including fair value assessments for lending, the price and value outcome, and supporting borrowers in financial difficulty.

Take note

Consumer Duty is not optional. All FCA-authorised firms must comply with Principle 12 and its four outcomes: products and services, price and value, consumer understanding, and consumer support. For credit firms, this means demonstrating fair value and appropriate support for borrowers in difficulty.

You have completed this learning path

You now understand the key steps to offering consumer credit compliantly. Your priorities are:

Confirm your planned activity is regulated and identify the correct FCA permissions
Apply for FCA authorisation well in advance of your launch date
Build compliant pre-contract disclosure and affordability assessment processes
Ensure all credit advertising meets financial promotions requirements
Embed ongoing compliance monitoring and Consumer Duty reviews

The guides signposted in this journey provide the detailed procedures for each step. Take them in order, and build compliance into your business from the outset.

Start offering consumer credit to customers

Before you offer credit: what you need to know

Understand the regulatory landscape

Understanding UK consumer credit regulation

Get FCA authorisation

FCA consumer credit authorisation

Set up pre-contract processes

Meet pre-contract disclosure requirements for credit

Set up affordability assessments

Conduct affordability assessments for credit

Comply with credit advertising rules

Comply with credit advertising rules

Verify your compliance and embed Consumer Duty

Consumer credit compliance checklist

FCA Consumer Duty for credit products

You have completed this learning path

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