In the dynamic world of consumer credit, staying ahead isn’t just about competitive rates or innovative products—it’s also about robust compliance. The Financial Conduct Authority (FCA) emphasises the significance of Product Sales Data (PSD) reporting, a critical component for firms operating in sectors such as debt collection, high-cost short-term credit (HCSTC), pawnbroking, and credit brokerage.
Understanding PSD Reporting
Product Sales Data (PSD) reporting provides the FCA with detailed insights into the consumer credit market, enabling effective supervision and ensuring firms deliver good outcomes for consumers. The reporting encompasses various data points, including agreement characteristics, borrower details, charges, fees, arrears, and forbearance.
PSD006: Spotlight on Short-Term Loans
For firms engaged in HCSTC and home credit loan agreements, PSD006 is the designated report. Introduced in February 2014, PSD006 collects granular data on short-term loans, capturing information such as loan amounts, annual percentage rates (APRs), transaction dates, and intermediary details.
Firms must submit PSD006 reports within 20 working days from the end of each calendar quarter.
Who Needs to Report?
Firms with permissions for consumer credit lending, particularly those involved in HCSTC, pawnbroking, and credit brokerage, are required to submit PSD reports if they have reported an annual total value of £2 million or more in outstanding consumer credit balances and/or new consumer credit advances in their CCR003 submissions.
Additionally, firms with permissions to enter into HCSTC or home credit loan agreements, even if they haven’t met the £2 million threshold, must submit PSD006 reports related to the sale of these agreements.
Why It Matters
Accurate and timely PSD reporting is not merely a regulatory obligation; it’s a reflection of a firm’s commitment to transparency and consumer protection. The data collected aids the FCA in monitoring market trends, identifying potential risks, and ensuring firms adhere to the Consumer Duty principles.
Failure to comply with PSD reporting requirements can lead to regulatory scrutiny, potential sanctions, and reputational damage.
Internal Benefits of Reviewing your Data
Creating appropriate reports to comply with the FCA’s Product Sales Data (PSD) requirements offers more than just regulatory peace of mind—it provides tangible operational advantages. When firms invest in structured, accurate data collection and reporting processes, they often unlock clearer visibility into their own business practices. By systematically tracking key metrics such as loan types, borrower behaviours, arrears trends, and forbearance actions, firms can identify inefficiencies, spot emerging risks, and make data-driven decisions to improve product performance and customer outcomes.
Additionally, embedding PSD reporting into internal workflows fosters a culture of accountability and consistency across departments. From compliance and risk to operations and finance, having reliable, centralised data ensures alignment and supports faster, more confident decision-making. In the long run, this can reduce manual errors, improve customer treatment strategies, and enhance a firm’s readiness for audits or regulatory inquiries, making compliance not just a necessity, but a strategic asset.
Best Practices for Compliance
- Stay Informed: Regularly review the FCA’s guidelines and updates related to PSD reporting.
- Data Accuracy: Ensure all submitted data is complete, accurate, and aligns with the specified formats.
- Timely Submissions: Adhere to the reporting deadlines to avoid non-compliance.
- Internal Audits: Periodically audit your reporting processes to identify and rectify any discrepancies
Conclusion
In the ever-evolving landscape of consumer credit, compliance with PSD reporting requirements is paramount. By embracing these obligations, firms not only align with regulatory expectations but also reinforce their dedication to ethical practices and consumer trust.
For detailed information on PSD reporting, visit the FCA’s official page: Product sales data – credit agreements
Note: This blog post is for informational purposes only and does not constitute legal advice. Firms should consult with compliance professionals or legal counsel for guidance specific to their operations.
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