Strengthening Oversight in Consumer Credit: What You Need to Know About FCA PS25/3

Since the introduction of regulatory reporting requirements in 2014, consumer credit firms have been obligated to submit periodic returns to the Financial Conduct Authority (“FCA”), offering aggregated insights into their credit-related activities. These returns were intended to support the FCA in identifying emerging risks and maintaining effective oversight of the sector. However, in practice, the FCA has reported that data submitted has often proven to be inconsistent and insufficient, failing to reflect the actual harms and challenges faced within the industry. 

Introducing PS25/3 – A Targeted Regulatory Shift 

To address these challenges, the FCA introduced Policy Statement 25/3 (“PS25/3”), designed to strengthen its supervisory framework across several key areas. The initiative seeks to ensure a suitable level of consumer protection by enhancing the FCA’s ability to identify, assess and mitigate risks before they cause harm. It also aims to safeguard and improve market integrity by enabling the FCA to act more decisively and swiftly, ensuring that markets operate fairly and efficiently.  

What Does PS25/3 Require? 

To achieve these objectives, the FCA is introducing a new data return applicable to consumer credit firms that hold permissions for one or more of the regulated activities listed under SUP 16.3 of the FCA Handbook: 

• credit broking; 

• debt adjusting; 

• debt counselling; and  

• providing credit information services.  

The new return will come into effect on 1 July 2025 and must be submitted annually through RegData, aligned with each firm’s accounting reference date. It will be formally set out in the FCA Handbook under SUP 16 Annex 38AD. 

Firms will be required to submit the return if they held any of the relevant permissions for at least one day during the applicable reporting period, regardless of whether they were trading at the time. 

This enhanced data return will strengthen regulatory oversight by collecting detailed and structured information from firms operating in these areas. The return will consist of five standardised mandatory sections that all applicable firms must complete, irrespective of their specific permissions.  

The FCA has confirmed that no de minimis or size-based exemption will apply, all firms with the relevant permissions, regardless of size or volume of activity, must submit the return. 

These sections will collect data on:  

1. The regulated activities undertaken by firms over the past 12 months;  
2. The nature of their business models, including the financial products, goods or services they offer; their marketing practices and consumer acquisition channels;  
3. The revenue generated from both credit and non-credit related activities; and 
4. Staffing information, including the number of employees, their roles, and whether incentive or remuneration schemes are linked to sales performance, a key consideration under the FCA’s Consumer Duty and conduct risk expectations.  

In addition to these mandatory sections, firms must also respond to activity-specific supplemental questions based on their specific regulated activities. 

The FCA’s Aims 

Through this newly introduced regulatory return regime, the FCA aims to: 

• Offer valuable insights into the operation of consumer credit markets; 

• Provide feedback on how firms are conducting their business; 

• Specifically, the FCA may use the data to assess whether firms are meeting the four outcomes under PRIN 2A, including the provision of fair value, appropriate consumer understanding, and outcomes for vulnerable customers.  

With higher-quality data, the FCA will be better positioned to prioritise its focus on firms posing the greatest risk, while adopting a proportionate supervisory approach for lower-risk firms.  

How Can Complyport Help? 

Complyport offers expert regulatory compliance support to assist firms in meeting their obligations under PS25/3 and the wider FCA regime: 

• Consumer Duty Policy Review: Assess and enhance your Consumer Duty policies to ensure they align with FCA requirements. 

• Staff Training: Provide tailored training on Consumer Duty obligations and best practices. 

• Ongoing Support: Offer regular audits, gap analyses and advisory services to maintain robust compliance. 

• Risk Mitigation: Help reduce the risk of non-compliance, thereby avoiding regulatory penalties and reputational damage. 

Book a meeting with one of our Subject Matter Experts to ensure you remain compliant and well-positioned in the evolving UK regulatory landscape. 

Ask ViCA, your Virtual Compliance Assistant. Claim your complimentary 20 queries today! Register here: https://vica.chat