Consumer Credit Act reform and regulated complaint handling

The Consumer Credit Act 1974 came into force over 50 years ago and remains fundamental to regulated credit complaints.

Several sections of the Consumer Credit Act can be relevant to regulated credit complaints, depending on the product, issue and customer journey. For this article, the clearest examples are section 75 claims and section 140A unfair relationship arguments, because both show why complaint teams need strong evidence, clear reasoning and a case file that is easy to follow.

The government announced its proposed reform of the Consumer Credit Act on 18 May 2026. The revised rules are still to be finalised, but complaint teams don’t need to wait for the details before reviewing how well current processes support customer understanding, clear communication and fair outcomes.

The government says many of the Act’s detailed and prescriptive requirements are expected to move into the FCA rulebook. It says the aim is to give consumers clearer information when using credit cards, loans and overdrafts, while giving firms a more flexible framework that can adapt as products and technology change.

For regulated complaint teams, this raises a practical question.

When a customer challenges a credit agreement, a notice, the way information was explained, or the outcome of their complaint, can the firm clearly show what happened and why the decision was fair?

Why is the Consumer Credit Act being reformed?

The Consumer Credit Act was introduced in 1974, long before online credit applications, app-based lending, digital statements, open banking, embedded finance and buy now pay later became part of everyday borrowing.

The government’s view is that parts of the Act are too prescriptive for the way in which credit now works. Some requirements are wrapped in legislation, which makes them harder to update when products, customer behaviour and technology change.

The reform is intended to move many of those detailed requirements into FCA rules. In practice, this should allow the FCA to update the framework more easily and test whether information is clear, useful and provided to customers at the right time.

The Phase 1 consultation focused on information requirements, sanctions and criminal offences.

This point is important for complaint teams.

If the future framework places more emphasis on clear communication, customer understanding and Consumer Duty outcomes, complaint files will need to show more than whether the right document was sent. They’ll need to show whether the customer journey made sense.

What’s expected to change under the Consumer Credit Act reform?

To be clear, the full details of the reform haven’t been confirmed yet, so firms shouldn’t treat this as a finished rulebook.

What we do know is that the government plans to move many of the Consumer Credit Act’s detailed and prescriptive requirements into FCA rules. This includes areas where the current framework can feel rigid, especially around how and when information must be given to customers.

The aim is to create a more flexible credit framework, with information customers can use and rules that can adapt more easily as products and technology change.

For complaint teams, the important point isn’t only where the rules are held. It’s how firms will evidence the customer journey when a complaint is raised later.

If more of the detail moves into the FCA rulebook, complaint handling is likely to become even more closely tied to the quality of the customer journey, the timing of communications, the clarity of explanations, and whether the firm can evidence how the customer was treated fairly.

This means the complaint file still must do the heavy lifting.

It needs to show the agreement, notices, communications, customer contact, support offered, decisions made and the reasoning behind the outcome, without someone having to rebuild the story from inboxes, shared folders, CRM notes and spreadsheets.

Why the Consumer Credit Act reform affects regulated complaint teams

In consumer credit complaints, the evidence often makes or breaks the review.

A customer might complain about the agreement they signed, how the cost of credit was explained, whether a notice was sent correctly, how arrears were handled, or whether they understood their rights at the time.

By the time the complaint reaches the case handler, the case may already involve sales notes, account activity, arrears contact, customer communications, vulnerability information and previous decisions.

This is where complaint handling becomes much harder than it needs to be.

If the CCA reform leads to more emphasis on FCA rules, Consumer Duty, clear communication and customer understanding, complaint teams will need records that make the journey easy to review. They’ll need to see what the customer received, what they queried, what the firm did next and why the outcome was reached.

This isn’t just about defending a complaint.

It’s about being able to investigate properly, spot whether something went wrong, put it right where needed, and explain the outcome in a way the customer can understand.

Why customer understanding matters in consumer credit complaints

The government’s announcement focuses on clearer information for consumers. This is welcome, but in complaint handling, the issue is often more practical than whether information was technically provided.

The real question is whether the customer understood what the information meant for them.

This comes up a lot in consumer credit complaints. A customer may have received the agreement, the notice, the statement or the arrears letter, but still not understood the cost, the risk, the options available, or what would happen if their circumstances changed.

Understanding what an APR means, is a good example.

Most people know APR is something they should look at, but this doesn’t mean they understand what it’s telling them, especially when comparing short-term and longer-term borrowing.

I’ve also worked with teams selling financial products where APR wasn’t always fully understood by the people expected to explain it. So, it’s not hard to see why customers don’t always get the clear, practical explanation they need before making a decision.

Some customers feel embarrassed asking for an explanation because they think they should already understand it. Others focus on the monthly payment because this feels more immediate than the total cost of credit.

This becomes even more important for vulnerable customers, because the support they need may affect how information should be explained, checked and followed up.

From a complaint handling perspective, this is where the gap opens up.

The firm may feel the technical information was disclosed properly. The customer may feel they didn’t understand what it meant in practice.

This is why complaint records need to show more than the document trail. They need to help the case handler understand the customer journey, the questions asked, the explanations given, the support offered and the reasoning behind the outcome.

Why evidence-ready complaint files matter

If more of the Consumer Credit Act’s detailed requirements move into the FCA rulebook, including areas such as customer information and sanctions, complaint teams may have to work even harder to show how a fair decision was reached. Currently, teams using manual processes are already finding this one of their biggest challenges.

This isn’t just about having documents saved somewhere. It’s about whether the case handler can follow the sequence of events clearly enough to make a sound decision.

For consumer credit complaints, this means the case handler may need to review the agreement, the customer contact, the account history and the reasoning behind earlier decisions as one connected story.

The risk comes when these records are held in different places, written in different styles, or captured in systems such as CRMs or spreadsheets, that were never designed for regulated complaint handling.

When everything is held in one complaint management system, the case handler can understand the complaint more quickly, review the evidence properly, and explain the outcome with more confidence.

Good complaint evidence should make the case easier to review. It should help the team follow the sequence of events, check the key records and understand the reasoning behind the outcome.

This becomes even more important if the complaint is escalated to FOS, reviewed by compliance, or used as MI from root cause analysis reporting.

How Consumer Duty connects to the proposed CCA reform

Consumer Duty will be central to how the FCA approaches the proposed Consumer Credit Act reform.

Complaint teams will still need to check the technical detail, including the agreement, notices, account history and relevant rules. But the review can’t stop there. It also needs to consider the customer journey, the information the customer received, and whether the firm’s response was fair in the circumstances.

This means the case file needs to show how the customer journey was reviewed, not just whether the right document was present. If the complaint involves financial difficulty, vulnerability, confusing information, or a fee the customer says they didn’t understand, the review needs enough evidence to show how those points were considered.

This is where complaint handling and Consumer Duty meet. The file should help the case handler understand the sequence of events, how the customer was affected, what the firm did in response and why the outcome reached was fair.

What the proposed CCA reform could mean for lenders and customers

For lenders, one of the practical aims of CCA reform is to make the consumer credit framework easier to work with.

The Phase 1 consultation focused on whether it was possible to move away from some of the more rigid requirements in the Act and allow more detail to be set through FCA rules instead.

This could give lenders more room to design simpler, clearer and better-timed information for customers, rather than relying on documents that are technically compliant but difficult for many people to understand.

But clearer wording doesn’t always mean better understanding. This is important to remember.

People process numbers and information differently.

For example: “50%” and “1 in 2” mean the same thing, but many people will understand “1 in 2” more easily because it’s easier to picture.

The same applies when customers are trying to understand percentages and charges.

A statement such as “£5 or 3%, whichever is higher” may be technically correct, but it still expects the customer to work out what this means in practice.

If the customer withdraws £30, 3% would be 90p, so the fee would be £5.

If the customer withdraws £100, 3% would be £3, so the fee would still be £5.

These types of example can make the information easier to understand without the customer needing to use a calculator.

For customers, better-designed information can help them understand the cost, the options available and the consequences if things change.

For complaint teams, this can also affect what needs to be captured and reviewed later. If customers repeatedly complain about fees, notices or product explanations, firms need enough information on the case to understand whether the issue is isolated or part of a wider pattern.

This is also where good quality data capture matters, including EODs, because firms need to monitor whether the same issues are appearing across complaints and identify trends linked to customer understanding, charges, notices or product explanations.

What proposed changes to CCA sanctions could mean for complaint teams

The Phase 1 consultation also reviewed CCA sanctions, including whether some of the automatic consequences for non-compliance are still proportionate.

Under the current Consumer Credit Act framework, some breaches can have serious consequences. Depending on the issue, this can include agreements being unenforceable without a court order or until the breach is fixed, or restrictions on interest and default sums.

The work on the reform is reviewing whether some of these sanctions should be removed, changed or replaced, given the role FCA regulation, FOS decisions and Consumer Duty now play in consumer credit.

For lenders, this could reduce some of the technical risk attached to historic CCA wording and process failures.

For complaint teams, the practical work may need even more care because the review may rely less on whether a technical sanction applies and more on the case history, how the customer was affected, and whether the firm’s response was fair.

If a statutory consequence changes, the complaint review may still need to consider the customer impact, the firm’s reasoning and whether the response was fair.

This is where a clear complaint file makes the review much easier.

Even if the statutory consequence changes, the complaint still needs a clear review, a reasoned outcome and enough evidence to show how the firm reached its decision.

How FOS looks at CCA-related complaints

If a customer remains unhappy after the firm’s final response to a complaint about a regulated financial product or service, they can take the complaint to the Financial Ombudsman Service (FOS).

This isn’t new. FOS already decides complaints by looking at what’s fair and reasonable in the circumstances, taking account of the relevant law, FCA rules, guidance, standards, codes and good industry practice.

For CCA-related complaints, this means the complaint file needs to show more than the steps taken. If the complaint involves a section 75 claim, an unfair relationship argument, arrears handling, a default notice, or the way credit information was explained, the file needs to show how the firm considered the issue and why it reached its outcome.

Proposed CCA reform doesn’t change that basic principle. What it may change over time is where more of the detailed requirements are found, with Consumer Duty closely alongside how customer understanding, communication and fair outcomes are assessed.

This is where strong complaint evidence helps. A well-structured case file won’t make a poor decision fair, but it will make it easier for the case handler, quality assurance team, compliance team and FOS to understand the sequence of events and why the firm reached its decision.

What complaint teams should be reviewing now

Although the final rules of the CCA reform aren’t yet known, Consumer Duty already expects firms to focus on customer understanding and good outcomes. So, this isn’t a case of waiting for the rules to change before reviewing complaint processes.

If anything, the direction suggests firms may need even stronger evidence that credit complaints have been reviewed fairly, especially where the complaint involves customer understanding, technical requirements, communication timing or support for customers in financial difficulty.

A useful starting point is whether case handlers can easily see the credit agreement, key documents, customer communications, arrears activity, affordability information, vulnerability notes, support offered, previous decisions and the reasoning behind the outcome in one place.

The point isn’t to create a longer checklist for already busy teams. It’s to make sure the file helps the case handler understand the complaint without having to rebuild the customer journey from different systems.

Leaders may also want to review whether complaint MI can show themes linked to customer understanding, communication timing, financial difficulty, vulnerable customers, section 75 claims, section 140A unfair relationship arguments, and recurring issues with notices or credit explanations.

This is where complaint data becomes useful beyond reporting. It helps firms see whether the same issues are coming up repeatedly, whether a process is causing confusion, and whether customers are raising concerns that need to be fixed earlier in the journey.

How complaint software can support CCA-related complaints

CCA-related complaints can be difficult to review when the information is spread across systems, teams and documents.

Good complaint software should bring the case history, evidence, customer contact and decision rationale together, so the case handler can review the complaint without rebuilding the story from scratch.

For leaders, the value is not just in the individual case file. Structured workflows and usable complaint MI can help show whether the same issues are appearing across complaints, including concerns about notices, fees, arrears communication, customer understanding or section 75 and section 140A issues.

This is where complaint software can support both sides of the process: helping case handlers reach fair decisions and helping leaders spot the patterns that need attention.

Final thoughts

The proposed Consumer Credit Act reform isn’t something complaint teams should ignore until the final rules arrive.

Consumer Duty already expects firms to think about customer understanding and fair outcomes, so the reform is more likely to sharpen an existing expectation than create a completely new one.

For lenders, simpler and clearer credit information could be a positive change. For customers, it should make the cost, timing and consequences of credit easier to understand.

For complaint teams, the ongoing challenge will be evidence.

If you’re still using manual processes and finding it difficult to consistently evidence outcomes, get in touch for a demo.