CAP has responded to FCA’s consultation reviewing the financial promotions rules for consumer credit
Overall Observations:
- CAP has significant concerns about the removal of protections currently set out in CONC without sufficient evidence that the Consumer Duty will effectively fill the gap now and in the future.
Our key concerns are:
- The Consumer Duty, while a positive development, has not yet been demonstrated to be consistently enforced. There is limited evidence of pushback where firms fail to meet their obligations, which reduces our confidence that the Duty alone will adequately cover specific provisions removed from CONC.
- Removing clear, specific regulation and replacing it with general principles of good faith creates ambiguity. Vague wording and lack of accountable rules leave key protections open to interpretation and disproportionately exposes vulnerable consumers to both uncertainty and risk.
- While the majority of firms may act in good faith, specific rules are essential to address the behaviour of bad actors. Without explicit expectations in CONC, holding those firms to account becomes more difficult and time-consuming while giving them greater scope for underhand actions.
- Any reform must be considered holistically, with consumer protection at its core.
- CAP is concerned about the potential knock-on effect on cases of problem debt and the consequent pressure on debt advice funding and resources.
