Understanding FCA enforcement trends is critical for consumer credit and secured lending firms aiming to minimise regulatory risk and maintain operational resilience. Recent enforcement actions, public censures, and thematic reviews highlight persistent areas where firms often fall short. For boards, compliance teams, and operational functions, staying ahead of these trends is not just about avoiding fines—it is about protecting reputation, ensuring consumer trust, and demonstrating robust governance.
The Current Regulatory Landscape
The FCA has signalled that 2025 will continue its focus on consumer outcomes, particularly under the Consumer Duty framework. Firms across the consumer credit and secured lending sectors are under close scrutiny for:
- High-Cost Credit and Subprime Lending: This includes short-term high-cost loans, second-charge lending, and Buy-Now-Pay-Later (BNPL) products. The FCA expects firms to perform rigorous affordability assessments, provide clear product disclosures, and manage arrears effectively.
- Financial Promotions and Marketing Compliance: Misleading adverts, unclear APR representations, and incomplete risk information remain common triggers for enforcement. The regulator increasingly monitors online channels, including comparison websites and influencer-led promotions.
- Reporting and Regulatory Returns: Accuracy, timeliness, and completeness in returns such as CCR009 and other prescribed reporting remain key. The FCA has indicated that repeated reporting failures can escalate to enforcement, particularly where consumer harm is evident.
- Consumer Duty Compliance: Firms must not only have policies and procedures in place but must also demonstrate measurable consumer outcomes. This includes fair value, vulnerable customer protection, and evidence of continuous monitoring.
Key Themes in Enforcement
Analysis of recent FCA publications and public statements reveals several persistent enforcement themes:
Mis-selling and Affordability Failures
Cases often arise where lenders or brokers fail to adequately assess a customer’s ability to repay, particularly in high-cost or subprime lending. Firms are expected to implement robust affordability frameworks, supported by MI that evidences decision-making.
Financial Promotions Missteps
Enforcement frequently targets misleading marketing, especially in digital channels. Typical pitfalls include:
- Headline APRs without qualifying criteria
- “Guaranteed acceptance” claims
- Comparisons that do not reflect actual underwriting
- Omissions regarding risk or product costs
Reporting and Governance Weaknesses
Firms with repeated errors in regulatory reporting—late, incomplete, or inaccurate returns—risk supervisory engagement or formal enforcement. This underlines the importance of strong internal controls, data governance, and board oversight.
Vulnerable Customers and Consumer Duty Breaches
Vulnerability continues to be a regulatory priority. Enforcement action is likely where firms fail to identify or appropriately support vulnerable borrowers, or where processes do not evidence fair outcomes.
Lessons for Boards and Compliance Teams
Firms can mitigate enforcement risk by adopting proactive measures:
- Embed Data Governance: Accurate MI, regulatory returns, and audit trails are essential for demonstrating compliance.
- Monitor Consumer Outcomes: Use MI dashboards to track affordability assessments, arrears, complaints, and remedial actions.
- Audit Financial Promotions: Ensure all marketing materials—traditional, digital, and influencer-led—comply with FCA, Consumer Duty, and advertising standards.
- Review Policies and Procedures: Update operational processes to align with CCR009, Consumer Duty, and threshold conditions.
- Board Oversight and Accountability: Document evidence of oversight, challenge, and decision-making to demonstrate active governance.
The Role of Supervision and Thematic Reviews
The FCA increasingly uses data-led supervision, thematic reviews, and proactive engagement to identify potential risks. Recent thematic reviews have highlighted:
- High-cost credit affordability frameworks
- BNPL lending oversight
- Treatment of vulnerable consumers
- Complaints handling and remediation effectiveness
Consumer credit and secured lending firms that integrate these insights into their compliance frameworks are better positioned to anticipate regulatory queries and reduce the likelihood of enforcement action.
How ALPH Legal Can Assist
At ALPH Legal, we help consumer credit and secured lending firms translate enforcement intelligence into actionable compliance strategies:
- Enforcement Trend Analysis: Reviewing FCA publications and identifying relevant lessons.
- Business and Operational Reviews: Detecting gaps before the FCA does.
- QA and Oversight Support: Testing MI, promotions, and consumer outcomes for robustness.
- Policy and Strategy Alignment: Ensuring governance and operational procedures reflect current FCA expectations.
Firms that proactively respond to enforcement trends can minimise risk, protect reputation, and improve consumer outcomes, providing a competitive advantage in a highly regulated market.
Final Thoughts
The FCA’s approach to enforcement demonstrates a clear focus on consumer protection, transparency, and robust governance. Consumer credit and secured lending firms that embed strong oversight, maintain accurate reporting, and actively monitor outcomes will be better placed to navigate the evolving regulatory environment. Enforcement readiness is no longer just a compliance exercise—it is an integral part of operational excellence.
For tailored support around FCA enforcement readiness and regulatory intelligence, contact us directly.
ALPH Legal & Compliance can assist with all aspects of your business’s compliance needs, whether that be compliance structure and policy, internal/external audit, business and regulatory change support, authorisation, supervision or just some general expert advice and guidance!
Take action now with ALPH Legal & Compliance services!
With all the regulatory shifts on the horizon, now is the time to act. Don’t wait until compliance gaps appear—engage with ALPH Legal & Compliance today to ensure your firm is ahead of the curve. Whether you need tailored guidance, compliance support, or strategic insights to drive new business, ALPH Legal & Compliance is your trusted partner in navigating FCA regulations with confidence.