Summary
The FCA published CP 26/15 on 29 April 2026, entitled “Reviewing the financial promotions rules for consumer credit.”
The policy intent behind the consultation is to consolidate compliance requirements for financial promotions within the Consumer Duty, allowing for higher standards and greater flexibility than are possible within the current regime under CONC 3.
The paper includes two parts:
- Consultation Paper (CP). This is aimed at removing or simplifying the financial promotions rules for consumer credit in CONC 3 and instead requiring compliance with the high-level standards imposed by the Consumer Duty.
- Discussion Paper (DP). This invites views on whether the Annual Percentage Rate (APR) and other cost disclosures in CONC 3.5 could be amended to better promote consumer understanding relating to the cost of credit.
Timing
Responses should be submitted by 17 June 2026.
The FCA aims to publish the outcome of the CP later this year and will use the responses to the DP in order to consider whether to consult on any future policy interventions.
The CP describes merit in firms and consumers benefiting from the proposals as soon as possible and proposes the changes will take effect 3 months after they have been made without any transitional provisions being required.
Consultation Paper - The Details
With a few exceptions, all sections in CONC 3 are in scope of the consultation (other than those in relation to APR and other price disclosures, which are considered in the DP). The FCA proposes to remove certain rules in CONC 3 where the protections contained within the Consumer Duty are believed to provide sufficient (or greater) consumer protection.
The CP does not anticipate the removal of all rules in CONC 3 thereby preserving a consumer’s ability to bring a private action for breaches of CONC 3 (which is not available under the Consumer Duty). For example, the “clear, fair and not misleading" requirement in CONC 3.3.1R is regarded by the FCA as a key consumer protection which is proposed to be retained despite being reflected in the Consumer Duty.
By way of further example, the FCA proposes to remove CONC 3.3.1R(1A)(e) requiring that each financial promotion “does not disguise, omit, diminish or obscure important information, statements or warnings.” The removal is seen as justified by an overlap with the Consumer Duty, which requires firms to act in good faith towards retail customers (PRIN 2A.2.1R) and avoid causing foreseeable harm (PRIN 2A.2.8R).
Discussion Paper – The Details
The FCA acknowledges a wide consensus among stakeholders that the current Representative APR disclosure in advertising has flaws, however, there isn’t strong enough evidence to propose alternatives at this time. The DP seeks views from a broader range of stakeholders to help the FCA determine whether there is a case for future changes.
There are three key areas where views are sought:
1. The extent to which disclosure of the Representative APR (and its triggers) supports consumer understanding of the cost of credit and any alternatives.
The FCA acknowledges that while the Representative APR does offer an objective measure to compare costs, certain valid concerns remain. These include the usefulness in relation to short-term loans or the fact that the Representative APR can be heavily distorted by small differences in loan duration or number of instalments. Alternative proposals include:
- Pounds and pence disclosures i.e. communicating the cost of a loan in pounds and pence (which is meant to provide a more transparent view of the true cost of short-term loans); and
- Plain numbers i.e. replacing the Representative APR with alternative cost metrics, such as monthly repayments, total interest and total amount repayable (which, while helping customers better understand the cost of credit, will make true comparisons difficult).
To help inform its policy thinking on cost disclosures, the FCA commissioned two research papers (which are published alongside CP 26/15):
- Consumer Research Insight Report (October 2025)
Consumer Credit Act reform: consumer research insight report
- Behavioural Economics Research, (29th April 2026)
https://www.fca.org.uk/publication/research-notes/navigating-disclosure-trade-off-balancing-flexibility-standardisation-cost-credit-information.pdf
2. Whether the mandatory inclusion of a representative example, when triggered, supports consumer understanding.
The FCA notes that its requirements for the inclusion of a representative example may be counterintuitive and particularly difficult to understand. There are also particular issues in social media adverts where firms are limited by character space.
The FCA therefore asks whether a representative example should continue to be required in financial promotions based on the current triggers or at all – noting that it would still expect firms to consider what information to provide at the appropriate time in the customer journey to meet their obligations under the Consumer Duty and equip customers to make effective and properly informed decisions.
3. Whether the current 51% threshold for determining a Representative APR remains appropriate.
At its most basic, when including a Representative APR in financial promotions, a firm needs to reasonably expect that at least 51% of customers will get that APR or better as a result of that promotion.
The principal industry concern is that this requirement does not reflect the reality of product pricing, and that a substantial number of consumers may not receive the advertised rate once their application has been underwritten and approved.
The FCA therefore asks whether the current 51% approach for the representative APR is appropriate or whether alternatives should be explored, such as a higher threshold or setting rate caps. The FCA notes the tension between offering consumers price certainty early on and the ability of a firm to undertake risk-based pricing, which highlights the importance of any changes in this area given that they could substantially affect how firms offer credit.
