Deferred Payment Credit comes within the FCA’s perimeter

On 11 February, the FCA published Policy Statement 26/1 successful which it confirmed that draught rules relating to deferred outgo recognition (DPC) which it consulted connected backmost successful July 2025 volition beryllium taken forward, mostly unchanged.

The rules volition use from 15 July 2026 and, successful summary, necessitate DPC lenders to:

• provide borrowers with pre-contractual information, accusation during the people of the DPC statement and erstwhile a lawsuit misses a payment;

• carry retired creditworthiness and affordability assessments connected borrowers;

• complete regulatory reporting similar different regulated lenders, and

• comply with each different applicable sections of the FCA handbook, successful peculiar successful narration to the Consumer Duty, which volition beryllium the FCA’s main mode of policing DPC lenders fixed that the caller rules deliberately deficiency prescription. Borrowers volition besides get the quality to kick to the Financial Ombudsman Service but won’t beryllium eligible to assertion compensation from the Financial Services Compensation Scheme.

DPC lenders who were providing DPC recognition connected 15 July 2025 are eligible to participate a impermanent permissions authorities (TPR) to let them to support lending beyond 15 July 2026. The registration model opens connected 15 May 2026 and closes connected 1 July 2026.

While DPC lenders volition beryllium pleased to spot minimal changes to the rules consulted connected successful July 2025, determination are areas wherever DPC lenders volition request to deliberation carefully.

For already-regulated lenders offering DPC this volition beryllium concern arsenic usual. DPC lenders who person operated extracurricular of the FCA’s regulatory perimeter and person nary acquisition of being regulated volition person gone connected a steep learning curve arsenic they acquaint themselves with the applicable rules successful the FCA’s handbook.

But the days of tick-box compliance being capable are agelong successful the past. In summation to being capable to show that they person systems and controls successful place, these firms volition request to guarantee that their civilization besides aligns with FCA expectations. This means adopting a consumer-focused approach, avoiding foreseeable harm, ensuring that the code from the apical drives the close behaviours astatine each level, and ensuring and evidencing that bully outcomes are delivered to customers.

For immoderate DPC lenders, the compliance load and FCA expectations whitethorn beryllium to beryllium a agelong excessively acold and we whitethorn spot immoderate consolidation of lenders, and others retreat from the marketplace entirely.

The FCA rules present requirements connected DPC lenders to springiness borrowers pre-contract accusation and supply accusation during the beingness of the statement (including erstwhile borrowers autumn into arrears and whitethorn beryllium the taxable of enforcement action). DPC lenders volition request to draught these other documents and embed them into their processes. Under the Consumer Duty, DPC lenders volition besides request to grounds that they person considered the accusation needs of their customers, ensuring that customers had what they needed to marque informed decisions. This includes demonstrating that accusation was provided successful a form, and astatine a clip that was meaningful and applicable to the customer’s decision‑making process.