Why Consumer Credit Firms Can’t Afford to Get It Wrong
Ask anyone running a consumer credit firm, a high-cost short-term lender, or a credit broker what keeps them awake at night, and reporting to the FCA is likely to feature high on the list. It’s not glamorous, it rarely feels commercial, but it is one of the clearest ways the regulator takes the pulse of your business.
Two areas in particular demand attention: regulatory reporting and product sales data (PSD) returns. Both are non-negotiable obligations. Both are complex. And both are under increasing scrutiny as the FCA looks to spot trends, identify risks and intervene earlier where harm could arise.
So, what does this mean in practice for firms across the consumer credit space? And how can you prepare so that reporting becomes less of a headache and more of a controlled, repeatable process?
Why the FCA Cares About Data
The FCA’s regulatory reporting requirements exist to give it a reliable line of sight into firms’ financial soundness, operational resilience, and compliance with the rules. For credit firms, this includes information about loan volumes, arrears, defaults, complaints, and more.
Alongside this sits Product Sales Data (PSD) reporting, which digs deeper into the actual agreements you’re entering into with customers. This includes key metrics on product types, volumes, affordability assessments and customer outcomes. In short, it is how the regulator tests whether firms are meeting both the letter and the spirit of its rules, especially under Consumer Duty.
When the FCA reviews this data, it isn’t just filing it away. It’s using it to spot red flags: are arrears rising disproportionately in one segment? Are affordability checks slipping? Are brokers channelling customers into unsuitable products? These questions can quickly trigger supervisory queries or even a formal investigation.
The Challenges for Firms
For many consumer credit firms, particularly HCSTC lenders and brokers, the challenges of getting reporting right are very real:
- Data quality: Core systems aren’t always designed to capture the granular fields the FCA wants. Extracting the right information can be messy.
- Operational burden: Smaller firms often lack the dedicated compliance resource to manage complex returns alongside day-to-day business pressures.
- Interpretation gaps: The FCA’s rules are detailed, but grey areas remain. Firms are left asking: “Do we report this loan here, or there?”
- Timing pressure: Regulatory returns come with hard deadlines. Miss them, and the FCA will take notice—sometimes with late fees or escalated action.
- Reputational risk: A poorly prepared return doesn’t just annoy the regulator. It signals weak systems and controls, undermining credibility when you most need supervisory goodwill.
Preparation is Everything
The difference between firms that view reporting as a perpetual fire drill and those who handle it smoothly is simple: preparation.
Practical steps to take include:
- Map your obligations – understand exactly what reports are required, when, and who owns each return internally.
- Invest in data quality – align your CRM and loan management systems with FCA reporting fields, so you’re not relying on manual patch-ups at the last minute.
- Create a reporting calendar – plan submission windows in advance and build in time for review, not just production.
- Assign clear accountability – nominate a reporting lead, but ensure senior management oversight. Under SM&CR, responsibility ultimately sits at the top.
- Test and review – don’t wait for the regulator to flag inconsistencies. Conduct internal audits and spot-checks to identify weaknesses.
Where Alph Legal & Compliance Can Help
This is where Alph Legal & Compliance comes in. We work with firms across the consumer credit spectrum—from small brokers to established HCSTC lenders—to build reporting processes that stand up to scrutiny.
Our support covers:
- Compliance frameworks – ensuring systems and controls are robust, repeatable and proportionate.
- Business planning – embedding reporting into wider operational and financial planning.
- Audit and assurance reviews – independent testing of data quality, reporting processes and SM&CR accountability.
- FCA interactions – guiding firms through supervisory queries, data requests and regulatory challenges.
In short, we take the stress out of regulatory reporting so you can focus on running and growing your business.
Final Thought
Regulatory reporting and PSD submissions may never feel like the most rewarding part of running a credit firm. But they are one of the sharpest tools the FCA has to hold the sector to account. The firms that succeed are those who prepare early, invest in getting the detail right, and treat reporting as a core compliance function—not an afterthought.
For those that don’t, the risks are clear: supervisory heat, reputational damage, and in some cases, formal enforcement.
If you want peace of mind that your reporting is accurate, timely and fully defensible, now is the time to act. And Alph Legal & Compliance is here to help you every step of the way.
Learn more about our services here.