Consumer credit market


Poorly regulated consumer credit firms, including lenders and debt collectors, can cause or increase detriment for a wide range of consumers. Individuals with debt problems can be particularly vulnerable to unfair practices by credit or debt firms.

The government wants to ensure the consumer credit market is well functioning, sustainable, and able to meet consumers’ needs. We want regulation for the consumer credit market to impose proportionate burdens on firms. And we want to ensure consumers to be protected, and to have confidence that if something does go wrong the regulator will step in swiftly and decisively to put it right.


On 1 April 2014, responsibility for consumer credit regulation transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA).

Consumers are better protected under the new regime - the FCA is able to:

  • police the ‘gateway’ of firms entering the market more thoroughly
  • proactively identify risks to consumers
  • focus its supervisory resources on areas most likely to cause consumer harm;
  • approve individuals in influential roles in firms
  • operate a flexible regime to respond to innovations in the market
  • use its wide enforcement toolkit, including banning products and imposing fines
  • ensure consumers have access to redress.

The government also legislated in the Banking Reform Act 2013 to require the FCA to introduce a cap on the cost of payday loans, to help protect consumers from unfair costs. The FCA is currently designing the cap, which will be in place by 2 January 2015.


In June 2011, the National Audit Office released a report that concluded that the Office of Fair Trading (OFT) was not meeting the needs of the consumer. The report estimated that there was up to £450 million of unaddressed consumer detriment per year under the OFT regime.

In 2010 the government consulted on reforming consumer credit regulation

In March 2013, the government consulted on how it would transfer consumer credit regulation to the Financial Conduct Authority.