Insights ¦ Consumer Credit Regulatory Returns: Credit Broking, Debt Adjusting, Debt Counselling and Providing Credit Information Services

Key Take Aways

• The FCA has introduced a new regulatory reporting return aimed at consumer credit firms engaged in credit broking, debt adjusting, debt counselling, and credit information services, designed to improve data quality and supervision efficiency.

• The revised return will feature tailored questions across five core sections—permissions, business model, marketing, revenue, staff—plus specific permissions-based questions, aiming to clarify firms’ operational practices.

• Feedback from industry respondents led to a 27% reduction in questions—removing approximately 57 questions initially proposed—enhancing proportionality and easing firms’ compliance burden.

• The new data collection framework will replace existing CCR002 and CCR007 returns, with a phased approach to minimise industry disruption, and includes regulatory forbearance during the transition.

• The reporting frequency remains aligned with calendar years, with most respondents supporting this, although some firms suggest aligning with accounting reference dates to reduce duplication.

• The FCA plans to require consolidated reporting from principal firms, incorporating data from Appointed Representatives, to strengthen oversight and risk assessment.

• The data collected will support the FCA’s strategic objectives: enhancing consumer protection, market integrity, and competition, while also contributing to its data-led supervisory approach.

• The implementation timeline, initially proposed for May 2025, has received mixed feedback; the FCA plans to adjust as necessary, with adjustments to ease firms’ systems setup.

• The FCA’s cost-benefit analysis acknowledges underestimations of resource burdens, especially for smaller firms, leading to reduced question sets and improved proportionality.

• The new return aims to streamline compliance, reduce ad hoc requests, and foster easier understanding and completion for firms, bolstering confidence and regulatory certainty.

• The scope encompasses a broad range of regulated activities, with specific questions around marketing spend, referral channels, product types, and revenue streams, tailored to the nature of each firm’s activity.

• The policy emphasises data accuracy and relevance, with new guidance and flow diagrams provided to assist firms in correct completion and minimisation of errors.

Key Statistics

• The new return reduces the number of questions by 27%, removing 57 questions from the initial proposal.

• The FCA estimates the average one-off compliance cost per small firm at £1,460, with ongoing annual costs around £70.

• Over half of respondents supported maintaining the current six- or twelve-month reporting cycles aligned with calendar years.

• 74 responses were received during consultation, largely positive but highlighting concerns over proportionality and implementation timelines.

• The return will replace elements of CCR002 and CCR007, with phased removal following further consultation on other CCR elements.

• The new return will feature five mandatory sections with tailored permission-specific questions, plus periodic overlap with PSD data.

• The initial implementation date is 7 May 2025, subject to industry feedback and adjustments.

• The FCA’s analysis suggests that the proportion of firms with readily available data was overestimated initially, leading to the recent question reduction.

• The FCA’s cost estimate initially included £45.3 million for one-off costs, with ongoing costs estimated at approximately £2.3 million annually after recent adjustments.

• Data collection will cover a range of specific product types including credit for goods, motor vehicles, debt management, and credit information services.

• The FCA plans to provide guidance and flow diagrams to minimise errors and improve confidence in data submissions.

• Firms with Appointed Representatives are expected to submit consolidated data, with some questions requiring separate responses for principals and ARs.

Key Discussion Points

• Industry feedback highlighted a need to reduce reporting burden, leading to a 27% question reduction and phased implementation plans.

• Divergent views on reporting alignment emphasise balancing supervisory needs with minimising firms’ operational impacts.

• Concentration on quality and relevance of data, especially considering firms’ capacity to access and provide detailed loan agreement data.

• The importance of proportionate supervision is reflected in adjustments made to questions deemed disproportionate for smaller or non-core activity firms.

• The shift to calendar-year reporting aims to streamline data collection and reduce duplication with PSD, while some debate exists over alternative timing alignments.

• Enhancing oversight of Appointed Representatives through consolidated data is recognised as strengthening risk management but presents logistical challenges.

• The FCA’s phased approach intends to improve data-driven supervision without imposing undue burden, especially on smaller firms.

• Feedback led to targeted modifications, including clarification on permission scope, product activity, and referral mechanisms.

• The policy explicitly aims to improve the quality, consistency, and timeliness of sector data to better inform regulatory/maritime intervention.

• Cost estimates acknowledge underestimations, prompting recent adjustments to reduce questions and costs, particularly for SMEs.

• The consultation underscores a commitment to proportionality, clarity, and industry engagement as essential to effective regulatory reform.

• The overall strategic goal remains to foster consumer trust, which is supported by improved data quality and supervisory responsiveness.

Document Description

This article provides a detailed overview of the FCA’s proposed amendments to consumer credit regulatory returns, focusing on enhanced data collection for credit broking, debt adjusting, debt counselling, and credit information services. It covers the rationale behind these reforms, industry feedback, proposed adjustments, and upcoming implementation plans. The document aims to strengthen supervision through targeted, proportionate, and high-quality data, aligning with FCA’s strategic objectives to protect consumers, enhance market integrity, and promote effective competition. It also addresses industry concerns around costs, timelines, and data access, presenting a pathway towards more efficient regulation grounded in industry consultation and phased roll-out.