Credicorp
Consumer Duty one year on UK: what it changed for consumer lenders
The FCA's Consumer Duty has reshaped how consumer-credit firms treat customers. It governs consumer credit, not our business lending — here is the distinction.
The FCA's Consumer Duty has now been in force long enough for its effects to be visible across the consumer-finance industry. It is one of the most significant regulatory shifts UK consumer lenders have faced in years, and worth understanding even if, as is the case for us, it does not govern your own product. This article is commentary on what the Duty changed for the firms it applies to, and an explanation of why it does not apply to our business lending. To be clear at the outset: the Consumer Duty governs consumer credit, and our lending to companies sits outside it.
What the Consumer Duty is
The Consumer Duty is a set of rules and a higher standard of care the FCA introduced for firms providing products and services to retail consumers. At its heart is a requirement that firms act to deliver good outcomes for customers, rather than simply avoiding specific prohibited behaviours. You can read the FCA's own materials on it via gov.uk and the regulator's website, which we would recommend over paraphrases.
The Duty is usually described in terms of outcomes the FCA expects firms to deliver: products and services that meet customers' needs, fair value, clear and understandable communications, and support that helps customers act in their interests. The shift is one of emphasis, from "did the firm follow the rules?" to "did the customer get a good outcome?"
What it changed in practice
For consumer-credit firms, the Duty has prompted real operational change. Many have revisited how they explain costs, on the basis that information buried in dense documentation does not meet a standard of being clear and understandable. Others have re-examined whether their products genuinely offer fair value, and whether their support functions help vulnerable customers rather than frustrating them.
None of this is unique to lending, but lending is where the stakes are often highest, because the consequences of a poor decision can follow a consumer for years. The broad direction, clearer pricing, fairer value, better support, and an obligation to think about the customer's outcome, is one we find unobjectionable as a matter of principle, whatever the regulatory boundary.
Why it does not apply to our lending
Here is the part that matters for anyone reading this as a Credicorp customer or prospective borrower. The Consumer Duty applies to firms dealing with retail consumers: individuals acting outside their trade or profession. We do not lend to individuals. We lend to UK limited companies and LLPs, bodies corporate, for business purposes, to the company rather than to its director personally.
Because of that, our lending falls outside FCA consumer-credit regulation altogether, under Article 60B FSMA RAO 2001. A company is not an individual or a relevant recipient of credit under that order, so the consumer regime — including the Consumer Duty — does not govern our business loans. We are not FCA-authorised for consumer-credit lending, and we do not imply that we are. We set out the full picture in our support article on regulated vs unregulated business loans.
What that means for protections
It would be easy to read "outside the consumer regime" as a loophole, so we prefer to be direct about the consequences. Our borrowers do not have the protections the consumer-credit framework provides. In particular, this lending is not covered by the Financial Ombudsman Service or the FSCS, and after our internal complaints process the final escalation is the courts rather than an ombudsman. You can read how our complaints process works on our feedback and complaints page, and what FOS and FSCS do and do not cover in our explainer.
Our view: borrow the standard, not the obligation
The Consumer Duty does not bind us, but the principles behind it, clear pricing, fair value, genuine support, are not bad principles. We try to hold ourselves to comparable standards as a matter of choice rather than compulsion: every figure shown on your Key Information Sheet (KIS) before you sign, costs stated plainly, and a frank acknowledgement that short-term borrowing is expensive. You can see what we currently offer on our business loans page. Voluntary alignment is not the same as legal protection, and we would never pretend otherwise, but we think a regulatory boundary is a poor excuse for treating people badly.
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