What It Means for Consumer Credit Firms in Practice
The Data (Use and Access) Act 2025 is not a complete reset of UK data protection law.
But it does change how firms are expected to apply it.
For consumer credit lenders and brokers, the impact is less about new rules and more about how existing expectations are interpreted in practice. The direction of travel is clear. Firms are being given more flexibility in how data can be used, but with a corresponding expectation that they understand and can justify their decisions.
For compliance and operational teams, this creates both opportunity and risk.
Moving from strict interpretation to accountable use
At its core, the Act introduces a more pragmatic approach to data use.
Concepts such as “recognised legitimate interests” are intended to provide greater clarity on when firms can rely on legitimate interests as a lawful basis for processing. In theory, this reduces the need for firms to rely on consent in situations where data use is clearly expected and proportionate.
For consumer credit firms, this is particularly relevant in areas such as fraud prevention, credit risk assessment and account management.
However, the key point is this. Flexibility does not remove responsibility.
Firms are still expected to demonstrate that their use of data is necessary, proportionate and aligned with customer expectations.
Consent remains a high-risk area
While the Act provides more clarity around legitimate interests, consent remains a key area of regulatory focus.
This is especially true in marketing and lead generation, where practices have historically been inconsistent. Poorly structured consent wording, unclear data sharing arrangements and over-reliance on third parties continue to create risk.
The Information Commissioner’s Office has made it clear that consent must still be freely given, specific and informed. The Act does not dilute these requirements.
For firms, this means being clear about where consent is required and where legitimate interests can be relied upon. Getting this wrong can lead to both regulatory and reputational issues.
Data accuracy and accountability
One of the less visible but more important themes within the Act is the emphasis on accountability.
Firms are expected to understand the data they hold, how it is used and how it supports decision-making. This is particularly relevant in consumer credit, where data underpins affordability assessments, customer outcomes and complaints handling.
Inaccurate or poorly managed data can have direct consequences. Customers may be declined incorrectly, offered unsuitable products or subject to inappropriate collections activity.
As expectations around data governance increase, these issues are more likely to be identified through complaints, DSARs or regulatory engagement.
Operational impact for consumer credit firms
In practice, the Act is likely to drive changes in how firms structure their data frameworks.
This includes reviewing lawful bases for processing, particularly where consent has historically been used as a default. It also involves strengthening documentation around how decisions are made and how data supports those decisions.
Firms should also consider how data flows across their business, particularly where third parties are involved. Lead generation, broker relationships and data sharing arrangements remain key risk areas.
The objective is not to create additional complexity, but to ensure that data use is clear, consistent and defensible.
The link to FCA expectations
Although the Act sits within the data protection framework, its impact extends into conduct regulation.
The Financial Conduct Authority is increasingly focused on how data supports customer outcomes. Affordability, vulnerability and complaints handling all rely on accurate and well-governed data.
Where data use is unclear or inconsistent, it becomes difficult to demonstrate that decisions are fair and reasonable.
This creates a clear overlap between ICO and FCA expectations. Firms need to consider data not just as a compliance requirement, but as a core part of how they deliver outcomes.
What firms should be doing now
The most effective approach is to review how data is currently used across the business.
This includes understanding where legitimate interests can be applied, where consent is required and how these decisions are documented. It also involves assessing data quality, governance and how information supports operational processes.
Firms should be confident that they can explain their approach clearly, both internally and to regulators.
How ALPH Legal & Compliance Can Support
ALPH Legal & Compliance supports consumer credit firms in navigating developments such as the Data (Use and Access) Act and aligning data practices with both ICO and FCA expectations.
We work with firms to review lawful basis decisions, assess data governance frameworks and ensure that data supports clear and consistent decision-making across the customer lifecycle. This includes operational reviews, policy alignment and support in strengthening data-related controls.
As regulatory expectations continue to evolve, firms that take a structured and proactive approach to data use will be far better positioned to manage risk and demonstrate compliance.
To discuss how ALPH can support your firm, speak to our team today