We welcome this opportunity to contribute to the FCA’s consultation on CONC 3 reform and discussion on cost disclosure. We see this as an opportunity to transform financial promotions and improve consumer outcomes, including understanding of credit and access to affordable credit, through the provision of appropriately designed regulation on financial promotions and cost disclosures.

We are strongly in favour of the proposed reforms to CONC 3, which streamline CONC 3 by removing duplicative, prescriptive requirements to be replaced by the outcomes-based Consumer Duty. However, we call on the FCA to bring CONC 3.7 into scope to allow for appropriate reform on ensuring a proportionate common minimum disclosure standard for brokers.

In relation to cost disclosure, our response looks at triggers and forms of cost disclosure alongside consideration of how alternative forms of cost disclosure would impact the market and consumer understanding. We call for the removal of the outdated and prescriptive ‘incentive’ and ‘access to credit’ triggers, while calling for the retention of the ‘comparison’ trigger, applied solely to product-specific advertising. We also call for a bespoke arrangement for credit marketplaces which should not have to represent the aggregate APR of their offerings in advertisements.

We believe that firms should be required to feature a standardised cost disclosure when specifically comparing products/services. In all other instances, advertisements should be made in line with the Consumer Duty and tailored FCA guidance on outcomes and what information should be presented to customers at each stage of the journey.

We recognise the issues with APR and short-term credit, where it annualises the cost, making short-term credit seem disproportionately expensive. We propose that products which have a term of less than twelve months would display a ‘Pounds and Pence’ breakdown of their cost, while longer-term products would be required to display the cost of their services in APR, with further flexibility to display alternative cost disclosure standards if desired. 

We call on the FCA to remove the Representative Example, which is a cumbersome item, which requires detailed analysis and takes up advertising space, while not meaningfully improving consumer outcomes. We believe that consumers are best informed when they are appropriately informed, not when they constantly receive information regardless of relevance.

Finally, we wish for the 51% threshold for Representative APR to be kept. The alternative proposals risk a reduction in demand and supply of credit.

Read the Consultation Here