UK-authorised consumer credit lenders Debt advice firms Credit reference agencies and credit information services Debt purchasers, debt collectors and debt administrators Consumer hire and third-party ownership providers for home energy infrastructure Firms manufacturing or distributing retail products subject to the Consumer Duty

What should firms consider doing?

Compliance teams may wish to inventory every financial and non-financial charge across each product's full customer journey and lifetime, including contingent, arrears, repeat and cumulative charges. Firms should consider refreshing fair value assessments to reconcile current pricing and charging data with quantified or otherwise evidenced customer benefits, product limitations, service quality and foreseeable risks. Firms may wish to document how assumptions, management information, customer outcomes and governance challenge support each fair value conclusion, with clear ownership and audit trails. Firms should consider segmenting analysis by relevant customer groups, including vulnerability characteristics, credit risk, product usage, distribution channel and customers experiencing financial difficulty, and testing whether outcomes differ materially. Compliance teams may wish to establish monitoring for arrears, complaints, cancellations, usage, enquiries, refunds, waivers, repeat charges and customer understanding, with defined escalation thresholds and remediation options. Firms should consider testing whether fees and charges are communicated clearly, prominently and at the point customers need them to make informed decisions, including through customer-understanding testing. Firms may wish to review controls for grace periods, charge caps, fee waivers and refunds and evidence that those controls are appropriately designed, operating effectively and reducing foreseeable harm. Where late or missed repayment charges are justified by reasonable costs, firms should consider documenting the cost methodology, evidence relied upon and relationship between the methodology and the charge level, alongside the separate fair value assessment.

🇬🇧 FCA Guidance medium

Fair value in consumer finance

Published 29 October 2026 | UK

AI Analysis

The FCA published supervisory findings on 29 October 2026 showing how consumer finance firms assess, evidence and monitor fair value under the Consumer Duty. It introduces no new rules, but signals heightened scrutiny of evidence-based assessments, total lifetime pricing, vulnerable-customer outcomes, charge transparency and controls against foreseeable harm, with independent legal commentary reading the publication as a practical indicator of future supervisory and enforcement expectations.

Key dates

2026-10-29: FCA published Fair value in consumer finance and associated supervisory commentary; the examples are effective as supervisory guidance and do not create new rules.

Suggested considerations

Compliance teams may wish to inventory every financial and non-financial charge across each product's full customer journey and lifetime, including contingent, arrears, repeat and cumulative charges.
Firms should consider refreshing fair value assessments to reconcile current pricing and charging data with quantified or otherwise evidenced customer benefits, product limitations, service quality and foreseeable risks.
Firms may wish to document how assumptions, management information, customer outcomes and governance challenge support each fair value conclusion, with clear ownership and audit trails.
Firms should consider segmenting analysis by relevant customer groups, including vulnerability characteristics, credit risk, product usage, distribution channel and customers experiencing financial difficulty, and testing whether outcomes differ materially.
Compliance teams may wish to establish monitoring for arrears, complaints, cancellations, usage, enquiries, refunds, waivers, repeat charges and customer understanding, with defined escalation thresholds and remediation options.
Firms should consider testing whether fees and charges are communicated clearly, prominently and at the point customers need them to make informed decisions, including through customer-understanding testing.
Firms may wish to review controls for grace periods, charge caps, fee waivers and refunds and evidence that those controls are appropriately designed, operating effectively and reducing foreseeable harm.
Where late or missed repayment charges are justified by reasonable costs, firms should consider documenting the cost methodology, evidence relied upon and relationship between the methodology and the charge level, alongside the separate fair value assessment.

What changed

The publication does not amend the FCA Handbook or create new mandatory actions. It consolidates good and poor practice under the existing price and value outcome in PRIN 2A.4 and FG22/5, including the requirement for manufacturers under PRIN 2A.4.2R(2) to conduct and regularly review value assessments at intervals appropriate to the product's nature and duration. Under PRIN 2A.4.8R, assessments must consider product benefits and quality, limitations, expected total price, contingent charges, recurring charges and relevant non-financial costs such as time, effort, inconvenience, use of personal data and service friction. The FCA expects assessments to compare customer prices with reasonably expected benefits, use current and sufficiently detailed management information, test outcomes acros

Compliance impact

The immediate legal impact is limited because the publication does not introduce new obligations, but the supervisory impact is material: weak, outdated or narrative-only assessments may make it difficult to demonstrate compliance with existing PRIN 2A and FG22/5 requirements. The FCA describes risks of foreseeable harm, poor outcomes for vulnerable or financially distressed customers, ineffective

Who is affected

UK-authorised consumer credit lenders
Debt advice firms
Credit reference agencies and credit information services
Debt purchasers, debt collectors and debt administrators
Consumer hire and third-party ownership providers for home energy infrastructure
Firms manufacturing or distributing retail products subject to the Consumer Duty

PRIN 2A.4
FG22/5
CONC 7.7.5R

References

AI-generated analysis. May contain errors or omissions — verify with the original FCA source before acting. Full disclaimer.

What the FCA said

Findings from our consumer finance supervisory work, highlighting good practice and areas for improvement in how firms assess, evidence and monitor fair value. ... In our consumer finance regulatory priorities report, we committed to continue making the Consumer Duty integral to how firms treat consumers. We said we…

Extract from FCA . Read the full notice at the source for the authoritative text.

Sectors

Consumer Credit Banking & Credit Mortgage & Lending

Topics

Consumer Protection / Conduct Senior Managers / Governance Reporting & Disclosure

Relevant Firm Types

BankFintechAll Firms

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