What you need to know this week
- Trump proposed limiting US credit card interest rates to 10% for one year from 20 January, with average rates at about 22% as of November 2025 and US credit card debt totalling more than $1 trillion.
- The UK economy grew by 0.3% in November 2025, and the next inflation figures are due on 21 January 2026.
- FLA data shows consumer finance new business grew by 3% in November 2025 versus November 2024, and was 5% higher across the 11 months to November 2025 versus the same period in 2024.
- The credit card and personal loans sectors reported new business 3% higher in November 2025 than November 2024, while retail store and online credit fell 3% over the same period.
- Registry Trust highlighted that there are 5.4m live judgments, with over a third under £500, and argued richer data could improve understanding of distress and access to credit.
- Only 12% of judgments are marked as satisfied, with stakeholders supporting a shift in burden of proof from individuals to claimants to improve accuracy and fairness.
- Registry Trust reported 257,699 consumer judgments in Q4 2025 (88.2% of total), with 5,376,235 judgments on the Register at end-Q4 and 97.2% in England & Wales.
- The ICO updated guidance on international transfers of personal data to make compliance with UK GDPR transfer rules quicker for businesses to understand and apply.
- For cases referred to FOS on and after 1 January 2026, the default interest rate on some compensation awards will track the Bank of England’s base (average) rate plus 1% and be calculated as a weighted average over the period.
- FOS is consulting on increasing the case fee from £650 to £680 and the compulsory levy to £86m, and is targeting 245,000 case resolutions in 2026/27 against an expected 188,000 new cases.
- The FCA confirmed on 13 January 2026 that not-for-profit debt advice firms carrying out regulated activities must be FCA-authorised and must evidence customer outcomes in line with Consumer Duty.
- Money Wellness is holding a workshop on 19/1/2026 (Monday afternoon) on shaping the future of AI in debt advice, and the CSA supplier member webinar hosted by MEGA.AI takes place on 29/1/2026.
Key Themes
US credit card pricing intervention and market sensitivity
- Trump proposed capping credit card interest rates at 10% for one year from 20 January, citing rising average rates and high revolving balances.
- The text notes the proposal has already affected US bank shares.
- Why it matters: illustrates the policy risk around consumer credit pricing and potential impacts on lenders’ profitability and strategy.
- link
UK macro outlook and near-term data releases
- UK GDP grew by 0.3% in November 2025 and inflation figures are scheduled for 21 January 2026.
- Why it matters: growth and inflation conditions shape affordability pressure, arrears volumes, and operational demand across credit and collections.
- link, link
FLA lending trends across consumer finance and second charge
- FLA reported consumer finance new business grew 3% year-on-year in November 2025 and was up 5% year-to-date (11 months).
- The credit card and personal loans sectors rose 3% year-on-year in November, while retail store and online credit fell 3%.
- Second charge commentary highlighted the proportion of business for consolidation and home improvements.
- Why it matters: product-mix shifts influence portfolio risk, customer vulnerability profiles, and collections capacity planning.
- link, link
Registry Trust: CCJ data quality, consumer understanding, and innovation
- Registry Trust highlighted scale (5.4m live judgments), low satisfaction marking (12%), and consumer confusion about CCJs and satisfaction.
- The text references potential improvements via automation, Smart Data and better taxonomies to reduce burden and improve accuracy.
- Why it matters: judgment data quality and comprehension affect credit decisioning, customer outcomes, and operational processes across the ecosystem.
- link, link, link
Regulatory communications and “intelligibility” initiatives
- Amplified Global highlighted consumer understanding and intelligibility as areas of focus for regulators in 2026, including BNPL under FCA supervision and motor finance commissions redress lessons.
- The text references testing three use cases: Targeted Support, Deferred Credit (BNPL), and credit card agreements, alongside partner collaboration.
- Why it matters: intelligible communications and reliable interpretation underpin Consumer Duty evidence and reduce missteps when introducing AI-enabled guidance.
- link, link
Data protection and outsourcing: international transfers
- The ICO updated and enhanced guidance on international transfers of personal data under UK GDPR.
- The text flags relevance for offshore BPO firms and outsourcing arrangements.
- Why it matters: transfer compliance can drive contract, governance and control requirements for outsourced collections and servicing.
- link
FOS redress changes, funding, and throughput targets
- FOS introduced a new default interest rate approach for some compensation awards for cases referred on or after 1 January 2026.
- FOS is consulting on increases to the case fee and compulsory levy, and set targets for 2026/27 inflow and resolution volumes.
- Why it matters: redress economics and capacity targets affect complaint handling strategy, cost forecasting, and operational planning.
- link, link
FCA authorisation expectations for not-for-profit debt advice firms
- The FCA stated on 13 January 2026 that NFP debt advice firms must be authorised to carry out regulated activities and must demonstrate Consumer Duty-aligned outcomes.
- The text lists expected documentation and governance artefacts, including policy registers, income & expenditure approaches, vulnerability policy alignment, wind-down planning, and QA framework detail.
- Why it matters: the authorisation bar and ongoing governance requirements shape operating models, cost of compliance, and evidence production.
- link, link
Breathing Space: scheme usage, recommendations, and outcome questions
- Citizens Advice published “More room to breathe” ahead of HM Treasury’s review before May 2026, recommending changes to duration, repeat access, protection gaps, and creditor compliance.
- The text reports StepChange registered 59% of all breathing spaces since May 2021 and highlights the split between standard and mental health crisis registrations in November 2025.
- Why it matters: scheme design and uptake influence remedy pathways, consumer outcomes, and creditor operational obligations.
- link, link
AI adoption in debt advice and collections: governance and capacity
- Money Wellness is developing a debt-advice-specific LLM proof-of-concept trained only on trusted sources and is running a workshop on 19/1/2026 to engage firms in testing.
- MEGA.AI’s CSA supplier member webinar on 29/1/2026 will cover scaled AI deployments, “human in the loop”, governance, and operational use cases.
- The text references parallel ecosystem initiatives, including MALG/Wyser research and MaPS references to AI in impact reporting.
- Why it matters: firms must align AI usage with QA, compliance oversight, and channel-consistent service delivery while managing demand spikes.
- link, link, link, link
Vulnerability collaboration and accreditation progress
- Aaseya announced a reusable OutSystems component including VRS capabilities to accelerate adoption while preserving workflow and governance control.
- Anglian Water received “Mental Health Accessible” accreditation from the Money and Mental Health Policy Institute following assessment and testing with an experience-led community.
- Why it matters: scalable vulnerability infrastructure and service accessibility are becoming differentiators and expectations across essential services and creditor ecosystems.
- link, link
Key Statistics
- Credit card interest rates in the US averaged about 22% as of November 2025.
- US credit card interest rates were 13% a decade ago.
- 37% of adults carry a credit card balance.
- Overall US credit card debt totals more than $1 trillion.
- UK GDP grew by 0.3% in November 2025.
- FLA consumer finance new business grew by 3% in November 2025 versus November 2024.
- In the 11 months to November 2025, consumer finance new business was 5% higher than the same period in 2024.
- The credit card and personal loans sectors reported new business 3% higher in November 2025 than November 2024.
- Retail store and online credit new business fell by 3% in November 2025 versus November 2024.
- The proportion of second charge new business volumes solely for consolidation was 58% in November.
- 22.4% of second charge new business volumes were for home improvements and loan consolidation.
- 10.8% of second charge new business volumes were solely for home improvements.
- Registry Trust cited 5.4m live judgments, with over a third under £500.
- Only 12% of judgments are marked as satisfied.
- 257,699 consumer judgments were recorded in Q4 2025 (88.2% of total).
- 5,376,235 judgments were on the Register at the end of Q4 2025.
- 97.2% of judgments are in England & Wales.
- FOS is consulting to increase the case fee from £650 to £680.
- FOS is consulting to increase the compulsory levy to £86m.
- FOS is targeting 245,000 case resolutions in 2026/27.
- FOS expects to receive 188,000 cases in 2026/27.
- In 2025, Citizens Advice supported over 400,000 people with debt.
- This is nearly a 45% increase compared with 2021.
- Between May 2021 and 30 November 2025, StepChange registered 59% of all breathing spaces.
- Of 7,151 breathing space registrations in November 2025, 7,009 were standard and 142 were Mental Health breathing space registrations.
- AI is referenced 13 times in the 2024/25 MaPS impact report.
Newsletter Contents
- Macro and market notes covering US credit card pricing proposals and UK GDP and inflation release timing.
- FLA updates on consumer finance new business performance and lending mix across products and channels.
- Vulnerability Matters podcast mention featuring a discussion on the psychology and mechanics of scamming.
- Registry Trust update covering register themes, event recording availability, Q4 2025 statistics, and an independent member appointment.
- Industry commentary on evolving customer expectations in UK utilities and partner updates for 2026 focus areas.
- Amplified Global note on intelligibility, BNPL supervision, and initial AI-focused regulatory use cases.
- ICO update on guidance for international transfers of personal data with implications for outsourcing.
- FOS updates on compensation interest rate methodology, consultation on funding, and 2026/27 case handling targets.
- FCA update on authorisation expectations for not-for-profit debt advice firms, documentation, and QA framework requirements.
- Compliance culture excerpt on SMF16 independence and FCA expectations for heads of compliance.
- Citizens Advice report summary on improving Breathing Space and the outcome questions debt advisers want answered.
- Events roundup including Money Wellness AI workshop (19/1/2026), MEGA.AI CSA webinar (29/1/2026), MALG/Wyser research participation, and a VRS conference on 7 May 2026.
Find the full DEMSA newsletter, commentary and links here
#DEMSA
RO-AR insider newsletter
Receive notifications of new RO-AR content notifications: Also subscribe here - unsubscribe anytime
