The Consumer Duty for lenders: a complete guide

What the Consumer Duty is

The Consumer Duty is an FCA standard, in force from 31 July 2023, that requires regulated firms to deliver and evidence good outcomes for retail customers. It raises the bar from treating customers fairly to actively delivering good outcomes and being able to prove it.

It sits alongside existing accountability frameworks such as the Senior Managers and Certification Regime, making clear who is responsible for customer outcomes.

The four outcomes

The Duty sets a consumer principle plus four outcomes:

• Products and services that meet the needs of an identified target market
• Price and value that is fair, not just competitive
• Consumer understanding, so customers can make informed decisions
• Consumer support that is as easy to use as the product was to buy

You can self-assess against all four with our free Consumer Duty readiness checker.

What it means for lenders

For lenders, the Duty touches the whole lifecycle. On products, lending must suit its target market. On value, pricing and risk-based pricing must offer fair value. On understanding, key terms, costs and the APR must be clear at the point of decision. On support, customers in difficulty must be treated well, with proper forbearance and no barriers to getting help.

Underpinning all of it is a proper affordability assessment: lending someone can't sustainably afford is rarely a good outcome.

Vulnerable customers

The Duty places particular weight on vulnerable customers. Firms must recognise vulnerability, respond with appropriate support, and monitor outcomes for vulnerable customers specifically, not just customers on average. Because vulnerability is widespread and often temporary, this is a day-to-day discipline, not an edge case.

Monitoring outcomes with data

The hardest part of the Duty is evidence. Firms must monitor outcomes and act where groups of customers are being harmed. That means turning each of the four outcomes into metrics, cutting them by customer group and by vulnerability, and watching for harm.

Our free Consumer Duty outcomes monitoring template sets out what to measure and the harm signals to watch for in each area.

Common gaps and how to close them

The most common gaps are not knowing whether communications are actually understood, being unable to evidence fair value, "sludge" that makes it harder to leave or complain than to buy, and poor outcomes in arrears. Each is fixable, but only if you can see it, which is why outcome monitoring is the foundation.

How Credit Canary helps

Credit Canary helps lenders deliver and evidence good outcomes: explainable decisions, verified affordability, supportive missed-payment handling, and analytics that monitor outcomes across the portfolio. Book a walkthrough to see how it supports your Consumer Duty work.