KEY THEMES+ ¦ DEMSA Summary

What you need to know this week

Ofgem raised the energy price cap for Q1 2026, increasing typical annual bills by around £3 for customers on variable tariffs.
The FTSE 100 rose above 10,000 for the first time, reflecting continued market optimism linked to AI-driven earnings expectations.
FCA opened a public enforcement investigation into The Claims Protection Agency Limited (TCPA) over motor finance-related financial promotions and sales practices.
TCPA entered a voluntary requirements restriction effective 12 August 2025, including halting new customer onboarding and withdrawing financial promotions.
FCA consulted on a motor finance consumer redress scheme (CP25/27) in late 2025, with final rules expected in February or March 2026.
Motor finance redress expectations remain significant, with estimates referencing 14.2m agreements and £11bn in costs, potentially affecting consumers in DMPs and IVAs.
Consumer Understanding remains a key supervisory priority, with lessons from insurance interventions applicable to debt solutions and onboarding journeys.
FCA published a statement on co-manufacturers (8 December 2025), clarifying Consumer Duty expectations across product chains and roles.
AI governance is moving from concept to implementation, with ISO management system approaches positioned as a practical framework for controls and accountability.
BS ISO/IEC 42001:2023 provides a management system standard for responsible AI adoption, aligning governance, risk, compliance and training.
BNPL/Deferred Payment Credit regulation remains a 2026 delivery priority, with product design expectations including “positive friction” to improve consumer decision-making.
MEGA.AI will run a CSA supplier member webinar on 29 January 2026.

Key Themes

Household affordability pressures and utilities bill risk
Ofgem increased the energy price cap for 1 January–31 March 2026, driving a small rise in variable tariff bills. This matters for collections and credit teams as energy affordability remains a leading indicator of emerging payment stress, inbound vulnerability flags, and prioritisation decisions within household budgets.
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Markets and AI-driven business expectations
The FTSE 100 moved above 10,000, with narrative linking equity performance to anticipated AI-led earnings growth. This matters for leaders in financial services and collections as AI investment, vendor selection, and operating model change increasingly sit alongside Consumer Duty and conduct risk expectations, affecting delivery priorities and governance structures.
FCA enforcement signalling and motor finance claims activity
FCA publicised an enforcement investigation into TCPA, citing concerns on financial promotions and sales tactics tied to potential motor finance claims. TCPA also operated under multiple trading names and entered a VREQ restricting onboarding and promotions. This matters because claims activity can drive consumer expectations, complaint volumes, affordability shocks (fees deducted from redress), and downstream impacts on repayment plans and regulated debt remedies. It also reinforces promotion governance, oversight of lead generation, and control frameworks for any outsourced or affiliated marketing activity.
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Consumer Duty execution across product chains and co-manufacturing
FCA clarified expectations for firms acting as co-manufacturers, aiming to reduce duplication while maintaining accountability for customer outcomes. This matters for credit, collections and debt solution providers operating within distribution chains, partnerships, white-label arrangements, or shared product design, where roles and responsibilities must be explicit for fair value, communications, and outcomes monitoring.
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Digital debt advice and CONC 8 readiness
A forward-looking focus on CONC 8 and digital debt advice highlights the operational and governance considerations as digital journeys expand. This matters because digitisation increases scale and speed, raising the bar on suitability, customer understanding, vulnerability identification, record-keeping, and quality assurance within advice and debt solution pathways.
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AI governance and management system approaches
The bulletin emphasised AI governance as firms move towards more strategic AI use cases, referencing BS ISO/IEC 42001:2023 and broader standards alignment. This matters because AI deployment in servicing and collections affects conduct, outcomes, explainability, model risk, data governance, and operational resilience; regulators increasingly expect evidenced controls, accountability, and continuous improvement rather than ad hoc experimentation.
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BNPL / Deferred Payment Credit regulation and customer journey design
BNPL regulation in 2026 remains a core regulatory delivery item, with emphasis on consumer understanding and product design interventions such as “positive friction”. StepChange highlighted risks around consumer understanding, low-friction journeys, and inconsistent support for borrowers in difficulty. This matters as BNPL arrears pipelines can accelerate quickly, increasing contact demand, disputes, complaints and vulnerability disclosures; firms will need compliant digital journeys, clear post-arrears communications, and consistent forbearance aligned with Duty.
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Consumer Understanding interventions and transferable lessons from insurance
The bulletin referenced Which?’s super-complaint on home and travel insurance and FCA follow-up actions, alongside FCA publications relevant to supporting customers in financial difficulty and planning priorities. This matters for collections and debt solutions because the same Consumer Understanding requirements apply to onboarding, communications, disclosures, annual reviews, and lifecycle servicing, particularly where consumers face vulnerability or low financial resilience.
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Sector engagement and collaboration events
MEGA.AI will run a CSA supplier member webinar on 29 January 2026. This is relevant as sector collaboration remains a primary route for shared learning on compliance-by-design, AI governance, vulnerability, and customer journey redesign, particularly where requirements cut across firms and supply chains.

Key Statistics

Energy price cap change: variable tariff prices increased by 0.2%, equivalent to ~£3 per year for a typical household.
TV licence enforcement: 2m visits to unlicensed homes in 2024/25, up 50% year-on-year.
TV licence enforcement productivity: visits per officer increased from 7,660 to 8,670.
TV licence prosecutions: people taken to court for evasion fell by 17.3% year-on-year.
TV licence collection costs: £166m spent on collection, 4.3% of fee income (up from £143m).
Postal price inflation referenced: 14.4% rise over the year.
Potential lost TV licence income: evasion estimated at £550m; combined potential lost income referenced at over £1.1bn in 2024/25.
Licences in force: 23.8m at year end 2024/25 (vs 24.1m in 2023/24); drop of 300,000 licences.
Licence fee level: £169.50 in 2024/25; licence fee income collected: £3.8bn.
BBC Group position: in-year deficit of £132m.
Licence fee evasion rate: 12.52%; households declaring no licence needed: 3.6m.
UK population estimate referenced: 69.3m mid-2024, increase of 755,300 (1.1%) from mid-2023.
Motor finance redress estimates referenced: 14.2m agreements, £11bn costs; agreements referenced from April 2007 to November 2024.
Insurance instalment affordability (quoted): 60% of motor and 41% of home policyholders paying by instalments did so due to inability to pay annually.

Newsletter Contents

Ofgem raised the energy price cap for Q1 2026, slightly increasing variable tariff bills.
FTSE 100 crossed 10,000 for the first time, with AI-linked earnings expectations cited as a driver.
FCA opened a public enforcement investigation into TCPA focused on motor finance-related promotions and sales tactics.
TCPA operated under multiple trading names and entered a VREQ effective 12 August 2025.
FCA CP25/27 on a motor finance redress scheme closed 12 December 2025; final rules expected February/March 2026.
Motor finance redress expectations were referenced as large-scale, with potential impacts on consumers in DMPs and IVAs.
Content referenced CONC 8 and digital debt advice considerations for 2026.
FCA statement on co-manufacturers clarified Consumer Duty expectations across shared product creation.
AI governance was positioned as a 2026 priority, referencing ISO-aligned management system approaches.
BS ISO/IEC 42001:2023 was cited as the primary standard for AI management systems.
BNPL regulation in 2026 was positioned as a key delivery item, including “positive friction” for consumer understanding.
MEGA.AI and CSA scheduled a supplier member webinar for 29 January 2026.