CONC - Consumer Credit Regulations

The FCA's Consumer Credit sourcebook (CONC) applies to all firms engaged in credit-related regulatory activities in the UK. This includes firms involved with debt counselling, credit broking and regulated credit agreements.

The general standards and principles outlined by CONC place a duty on firms to uphold the interests of their customers and ensure their fair treatment.

Our CONC - Consumer Credit Regulations Course explains the FCA's Conduct of Business Rules for consumer credit firms and how these impact daily operations.

Start your trial Course details

40 Minutes
For all staff
Based on UK legislation, but suitable for global audiences upon the removal of UK-specific references and translation as necessary.

Learning objectives

Recognise the purpose of the CONC sourcebook
Explain what the CONC general conduct of business standards are
Know the procedures for financial promotions and communications
Know the pre-contractual and post-contractual requirements
Identify the tenets of responsible lending
Recognise the procedures for dealing with arrears, default and recovery
Explain customers' rights to cancel

Welcome

What is CONC - Consumer Credit sourcebook?

What is the purpose of CONC?

Who does CONC apply to?

Other businesses covered
Exercise: Who is affected and to what extent?

General Standards

General principles
Duty to avoid misleading names
Exercise: Complying with Principle 6

Financial promotions and communications

The main rules
Never suggest that credit is available unconditionally
A decision in seconds - really?
Playing by the rules
Exercise: Unfair business practices
Misleading introductions
Exercise: Payday loan advert
Risk warnings for payday loans

Pre-contractual requirements

Risk warnings & standard disclosures
Providing adequate explanations
Pre-contract: Unfair business practices

Responsible lending

Assessing creditworthiness
Exercise: Creditworthiness & sustainability
Business conduct: Unfair practices by lenders

Post-contractual requirements

Exercise: Nancy & her storecard

Arrears, default & recovery

Ensuring that business practices are fair
Exercise: Jack's arrears

Cancellation

Exercise: Identifying the right to cancel

Summary

Affirmation

Assessment

Your questions, answered

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Can small businesses be held accountable under competition law?

Yes. Competition law applies to businesses of all sizes. Even small companies can face investigations and serious penalties for engaging in anti-competitive conduct.

Can small businesses be prosecuted under the Criminal Finances Act 2017?

Yes. The Act applies to all organisations, regardless of size. However, the HMRC’s guiding principles allow for proportionality, meaning smaller firms are expected to implement controls that match their risk level and operational complexity.

How can small businesses ensure compliance with proliferation financing regulations?

Even SMEs should implement basic risk assessments, maintain up-to-date sanctions screening tools, and train staff on red flags related to trade-based money laundering and dual-use items.

Which principle is most important in an insurance contract?

Utmost good faith is the most critical, requiring both parties to disclose all material facts. Without it, contracts risk being invalidated under UK insurance law.

What is proximate cause in insurance?

It is the dominant, effective cause of loss, not merely the last or nearest event. Courts use proximate cause to determine whether a peril covered by the policy actually triggered the claim.

How does the principle of indemnity work in real-life claims?

The principle of indemnity ensures you’re restored to your pre-loss financial state, not profiting from claims. For example, if your insured car repair costs £9,000, the insurer pays that amount, not the full policy limit.

What types of firms are regulated under CONC?

Under the Consumer Credit sourcebook (CONC), firms engaged in consumer credit activities, including lenders, credit brokers, debt management firms, and credit information services, are regulated by the Financial Conduct Authority (FCA). This encompasses a broad spectrum of consumer finance services, such as personal loans, hire purchase agreements, and credit broking.

How often should firms review their CONC compliance policies?

Firms are required to review their CONC compliance policies regularly to ensure they remain effective and up to date. While the FCA does not prescribe a specific review frequency, it is generally expected that firms assess their compliance arrangements periodically, taking into account changes in business operations, regulatory updates, and market conditions.

What triggers an FCA investigation into CONC breaches?

The FCA may initiate an investigation into potential breaches of CONC if there is evidence of widespread or repeated failures that could harm consumers. Triggers include patterns of non-compliance, consumer complaints, or findings from supervisory activities that suggest systemic issues.

What kind of staff training is required to meet CONC standards?

To meet CONC standards, firms must ensure that their staff receive appropriate training and supervision. This includes providing relevant training before employees work with reduced supervision and ensuring supervisors have the necessary technical knowledge and coaching skills.

How does insider trading affect businesses and investors?

Insider trading damages market fairness, giving some investors an unfair advantage and undermining trust. For businesses, it risks reputational harm and FCA penalties, even without personal gain. Investors face distorted prices and reduced confidence, with the FCA finding signs of insider dealing in nearly a third of UK takeovers.

What tools are used to detect insider trading?

The FCA relies on surveillance systems, transaction data, and Suspicious Transaction and Order Reports (STORs). Firms must keep insider lists and use internal trade monitoring, pre-clearance systems, and staff training.

How does the FCA regulate insider trading?

The FCA regulates insider trading under the Financial Services and Markets Act 2000, the Criminal Justice Act 1993, and UK MAR, reinforced by the Financial Services Act 2021. Sanctions include unlimited fines, injunctions, public censures, and up to 10 years’ imprisonment.

What is a Recognised Investment Exchange (RIE) and how is it regulated?

A Recognised Investment Exchange (RIE) is a UK exchange authorised by the FCA to trade securities or derivatives. RIEs must maintain orderly markets, monitor for abuse, and ensure member compliance, with the FCA supervising their operations and enforcing rules as needed.

What steps can firms take to avoid FCA penalties?

Firms can mitigate the risk of FCA penalties by establishing comprehensive compliance frameworks. This includes implementing clear policies on market abuse, conducting regular staff training, maintaining accurate insider lists, and ensuring timely submission of Suspicious Transaction and Order Reports (STORs). Additionally, firms should regularly audit their surveillance systems to detect and address any potential issues promptly.

How does the FCA monitor and detect market abuse?

The FCA employs advanced surveillance tools to monitor trading activities, including the analysis of transaction reports and order books. Firms are required to submit STORs when they suspect market abuse, and issuers must maintain insider lists. The FCA also collaborates with other regulators and uses data analytics to identify and investigate potential instances of market abuse, ensuring the integrity of UK financial markets.

What does FCA COBS stand for?

FCA COBS stands for the Financial Conduct Authority’s Conduct of Business Sourcebook, which sets out rules and guidance for how regulated firms must interact with clients, market products, and provide advice.

What is the main purpose of COBS?

Its goal is to ensure firms act honestly, fairly, and professionally in the best interests of clients, with clear, fair, and not misleading communications.

Where can I find the full COBS rules?

The complete COBS section is available in the FCA Handbook, which is updated frequently.

Who needs to comply with COBS rules?

Any FCA‑regulated firm carrying out designated investment business, ancillary services, or insurance‑related activities in the UK, including advisers, brokers, wealth managers, and investment platforms must comply.

Who do the FCA Principles apply to?

They apply to all FCA‑regulated firms and individuals performing controlled functions, regardless of size or sector.

How are the FCA Principles enforced?

The FCA enforces the Principles through regulatory, civil, and criminal powers, including fines, public censures, and prohibitions. Their approach is detailed in the FCA Enforcement Guide.

What happens if a firm fails to notify the FCA of an issue?

Firms are required to notify the FCA promptly of any matters that could have a significant adverse impact on their ability to meet regulatory requirements. Failure to do so can result in enforcement action, including fines or other sanctions.

How can firms ensure compliance with the FCA Principles?

Firms can ensure compliance with the FCA Principles by implementing robust governance frameworks, conducting regular risk assessments, and maintaining effective internal controls. This includes establishing clear policies and procedures, providing ongoing staff training, and fostering a culture of compliance throughout the organisation.

How often should FCA Code of Conduct training be refreshed to remain effective?

Firms should refresh Code of Conduct training at least annually, or more frequently if there are significant regulatory updates, changes in business processes, or lessons learned from compliance breaches. Regular refreshers help maintain awareness and reinforce the expected behaviours across the organisation.

How can firms tailor Code of Conduct training for high‑risk business areas?

Training should be customised to reflect the specific risks and responsibilities of high-risk areas, such as trading desks or advisory teams. This can include scenario-based exercises, role-specific guidance, and practical examples relevant to the department’s day-to-day activities, ensuring staff understand the real-world implications of the Conduct Rules.

What tools or technology can support ongoing compliance monitoring?

Firms can leverage compliance monitoring software to track employee behaviour, trade activity, and adherence to policies. This includes workflow tracking, automated alerts, data analytics, and communication surveillance systems to identify potential breaches quickly and efficiently.

What steps can be taken to rebuild trust after a breach of the Conduct Rules?

Rebuilding trust requires transparency, accountability, and proactive remediation. Firms should promptly investigate the breach, implement corrective measures, communicate clearly with stakeholders, and enhance training and oversight to prevent recurrence. Demonstrating a strong culture of compliance and ethical behaviour is key to restoring confidence among clients, staff, and regulators.

Who needs to comply with CASS rules?

Any firm regulated by the FCA that holds or controls client money or assets must comply with CASS rules. This includes investment firms, asset managers, and certain insurance intermediaries.

How often should firms review their CASS compliance procedures?

Firms should review their procedures at least annually, or whenever there are changes in regulation, business structure, or risk exposure. Regular internal audits and gap analyses are recommended.

What role does staff training play in CASS compliance?

Training is critical. Staff must understand their responsibilities under CASS, know how to handle client money and assets correctly, and be able to identify and escalate potential breaches.

Which FCA compliance topics are covered?

Skillcast supports financial-services learning in areas including Consumer Duty, SM&CR, Conduct Rules, financial crime, fraud, financial promotions, vulnerable customers, complaints, CASS, COBS, CONC, MCOB, operational resilience, data protection and information security.