What you need to know this week
- The Supreme Court ruled on the legality of motor finance discretionary commissions, with FCA response expected before 4 August.
- FCA calls for improvement to digital loan journeys, highlighting design issues impacting vulnerable customers.
- Insolvency Service annual plan includes strategic assessment of the IVA sector and DRO API development.
- Private rents outside London have increased by 44% in five years; StepChange highlights affordability risks for renters.
- Microsoft SharePoint vulnerability being actively exploited—NCSC urges urgent action.
- FCA feedback issued on Credit Reporting Governance Body’s interim report; data accuracy and vulnerability reporting under scrutiny.
- 45,917 DROs issued this year, up 41% following the removal of the £90 fee.
- Citizens Advice handled nearly 238,000 enquiries in June, with debt the second most common issue.
- VRS and TransUnion collaboration on vulnerability data sharing highlighted as best practice.
- FCA analysis reveals digital exclusion in the UK has fallen from 14% in 2017 to 2% in 2024.
- Nationwide partnership helped over 2,200 households access £1.2m in unclaimed support in four weeks.
- CSA UKCCC conference confirmed for 11 September; FourNet compliance event on 17 September in Manchester.
Key Themes
Motor Finance Commissions – Legal Ruling and Regulatory Response
The Supreme Court judgment, involving Close Brothers and FirstRand Bank, ruled on the legality of undisclosed commissions in hire purchase agreements. The FCA responded, confirming that a redress consultation decision will be made by 4 August. This is significant for credit firms with commission-based models, as it may set precedent for broader redress.
Digital Journey Oversight and Consumer Duty Compliance
The FCA released a review, highlighting how digital loan journeys may disadvantage vulnerable customers through poor design, sludge practices, or lack of ‘positive friction’. The press release warns firms to strengthen testing, MI, and frontline feedback loops. This is critical for lenders and debt collectors ensuring Consumer Duty compliance and fair outcomes.
Insolvency Service Strategic Plan and IVA Market Scrutiny
The Insolvency Service 2025–26 Plan identifies poor practices in the IVA market and outlines a strategic assessment of personal insolvency threats. It plans DRO API development with the advice sector and continues regulatory reform. The IVA Protocol 2025 discourages IVA use over DROs where applicable. These developments directly affect advisers, IPs, and firms working with debt relief solutions.
Vulnerability and Data Sharing Innovations
TransUnion and VRS announced a partnership, enhancing financial and non-financial vulnerability insight sharing. This aligns with FCA’s CIMS feedback, encouraging improved reporting of debt solutions, forbearance, and token payments. For credit and collections firms, these initiatives support better treatment of vulnerable customers and compliance with PS24/3.
Cost of Living – Rising Rents and Household Impact
ONS and Rightmove data show UK private rents rose by 44% over five years, outpacing earnings growth. StepChange reports private renters spend 37% of income on housing—more than social renters (29%) or mortgage holders (27%). This shift places financial stress on lower-income households, increasing demand for debt advice and forbearance services.
Cybersecurity Alert – Microsoft SharePoint Exploitation
The NCSC is urging immediate mitigation of a SharePoint vulnerability (CVE-2025-53770) under active exploitation in the UK. Financial organisations using Microsoft services should act promptly to protect sensitive data and ensure business continuity.
Council Tax Reform Consultation in Wales
Welsh Government launched a consultation on changes to council tax exemptions and discounts. This may affect household budgets and debt affordability in Wales and could lead to changes in council tax arrears management approaches.
Nationwide Customer Support Collaboration
Nationwide partnered with Policy in Practice to provide a telephone-based benefits calculator, resulting in £1.2m of unclaimed benefits accessed in four weeks by 2,200 households. This demonstrates how financial institutions can support financially vulnerable customers through embedded tools.
Market Intelligence – Citizens Advice and The Money Charity
Citizens Advice data shows debt advice enquiries were up 9.9% YoY in June 2025. The data can inform demand planning and product targeting for creditors, local authorities, and debt advice providers.
Consumer Credit and Digital Exclusion Insights
FCA’s Financial Lives Survey finds digital exclusion in the UK dropped to 2% in 2024. Firms may now assume a greater baseline of digital competence among customers, but must still account for usability and accessibility in journey design.
Upcoming Events
- CSA UKCCC Conference, 11 September 2025
- FourNet Compliance Event, 17 September 2025, Manchester (Event info)
Key Statistics
- 44% rise in private rents outside London since 2020 (Rightmove)
- £1,365 average rent outside London (Rightmove)
- 36% increase in average earnings over five years (ONS)
- 6.7% annual rent increase to June 2025 (ONS)
- £1,344 average UK monthly private rent (ONS)
- 3.9% UK house price growth YoY to May 2025 (ONS)
- 41% increase in DROs, totalling 45,917 (Insolvency Service)
- Citizens Advice answered 237,960 enquiries in June 2025 (+5.9% YoY)
- 46,401 debt-related issues raised in June 2025 (+9.9% YoY)
- Private renters spend 37% of income on housing vs 27% (mortgage) and 29% (social renters) (StepChange)
- Digital exclusion dropped from 14% (2017) to 2% (2024) (FCA Financial Lives Survey)
- Over 2,200 households accessed £1.2m in unclaimed support in four weeks (Nationwide)
Newsletter Contents
- Supreme Court ruling clarifies legality of motor finance commissions
- FCA examining digital lending design shortcomings and ‘sludge’ practices
- Insolvency Service begins strategic review of IVA market and DRO API development
- Private rent increases outpace wage growth, with affordability concerns rising
- SharePoint vulnerability prompts urgent action from UK cyber authorities
- FCA feedback to CRGB highlights importance of accurate debt reporting
- 45,917 DROs issued YTD following admin fee abolition
- Citizens Advice reports surge in debt-related enquiries
- VRS and TransUnion partnership enhances vulnerability data sharing
- UK digital exclusion significantly reduced, but usability gaps persist
- Policy in Practice tool with Nationwide unlocks £1.2m for 2,200 households
- CSA conference and FourNet event scheduled for September
Find the full DEMSA newsletter, commentary and links here
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