The Financial Conduct Authority is rewriting the rulebook for how lenders advertise consumer credit. On 29 April 2026 the FCA published Consultation Paper CP26/15, proposing to scrap a thicket of prescriptive rules dating back to 2004 and replace them with outcomes-based Consumer Duty compliance. Published alongside it is a Discussion Paper that asks a sharper question: does the Representative APR, the headline number you have been taught to compare loans by, actually help borrowers find the cheapest credit any more?
The consultation closes on 17 June 2026. Here is what is actually being proposed, why the APR question is more interesting than it sounds, and what it could mean for anyone shopping for a personal loan, credit card, or car finance in 2027 and beyond.
The short version
- CP26/15 was published 29 April 2026 and closes for responses on 17 June 2026. It is one of the FCA’s largest live consumer credit consultations.
- The main proposal: strip out prescriptive, often outdated content rules in CONC Chapter 3 (consumer credit financial promotions) and replace them with a principles-based approach under the Consumer Duty.
- Companion Discussion Paper: the FCA is asking whether Representative APR is still doing the job it was designed for, whether the 51% threshold (the rule that the advertised “representative” rate must be the one offered to at least 51% of accepted applicants) still works, and whether lenders should also show total repayment figures. Three specific alternatives are floated: (a) raise the threshold from 51% to 66%, requiring the advertised rate to apply to two-thirds of accepted applicants rather than just over half; (b) replace the Representative APR with a maximum APR for the product; or (c) require lenders to show the full range of APRs actually charged across accepted applications.
- FCA-commissioned PwC research found fewer than one in five consumers correctly identified the cheapest credit option when lower APR did not mean lower repayments.
- If the proposals go through, expect adverts to look different from late 2027 / 2028: less small-print, more emphasis on what you will actually pay back in pounds and pence, more focus on outcomes (do borrowers understand the deal?) and less on box-ticking.
What CONC Chapter 3 currently does, and why the FCA wants to change it
If you have ever read a credit card advert and seen text like “Representative 24.9% APR (variable) based on a credit limit of £1,200 and an assumed annual fee of £0”, you have read CONC Chapter 3 in action. The current rulebook is a detailed set of prescriptive requirements: when a financial promotion includes an interest rate, certain other figures must be shown alongside in a certain way; “representative examples” must be calculated on certain assumptions; certain warnings must be in certain font sizes.
Some of the rules date back to 2004. They predate the smartphone, the price-comparison website, the social-media influencer, BNPL, and most of the modern consumer credit landscape. The FCA’s argument is that the rulebook is now doing three unhelpful things at once:
- It is technically detailed but practically ignored. Consumers do not, in the main, read representative examples and APR-based comparisons. The disclosures exist; they do not drive decisions.
- It is awkward to apply to modern formats. A 280-character social media post or a 15-second video does not fit comfortably with the prescriptive footnote requirements that work on a printed magazine page.
- It distracts from the bigger question. The Consumer Duty (in force since July 2023) requires firms to deliver good outcomes for retail customers, including helping them make decisions that are right for them. A regime that focuses on whether the right footnote is in the right size, regardless of whether anyone benefits from it, is not a Consumer Duty regime.
CP26/15’s headline proposal is to delete most of the prescriptive content rules and require firms to demonstrate, under the Consumer Duty, that their financial promotions help customers understand the product and the cost. The FCA will keep a smaller core of explicit requirements (notably risk warnings on high-cost short-term credit) but expand the principles-based area.
The Representative APR question
Annual Percentage Rate (APR) is a calculated figure that bundles the interest rate, any fees, and the repayment schedule of a credit product into a single annualised percentage. The idea was that, by reducing different products to a comparable single number, borrowers could compare like with like.
Representative APR is a related but slightly different concept: in an advert, the lender must show the APR that at least 51% of accepted applicants actually received. This is the headline number you see on credit card adverts (“Representative 24.9% APR variable”).
Where APR works well:
- Comparing two loans of the same amount and term, with similar fee structures. Lower APR = lower cost. Simple.
- Annualising the cost of credit so you can compare a 12-month loan with a 36-month loan, in principle.
Where APR works less well:
- Comparing across credit types (a 0% purchase credit card vs an unsecured personal loan vs a car finance hire purchase agreement). Different repayment structures and fee patterns can mean the APR comparison is misleading.
- Comparing within a category where one product has a low APR but a large arrangement fee, and another has a higher APR with no fee. The APR captures both, but consumers often anchor on the headline rate and ignore the fee.
- “Representative” creates a known problem: 49% of accepted applicants may have been offered a higher APR, and the advertised rate is not what they got. The 51% threshold is a known weakness.
The FCA’s commissioned PwC research, referenced in the Discussion Paper, found that fewer than one in five consumers correctly identified the cheapest credit option when lower APR did not align with lower total repayments. That is a striking finding: the headline number consumers are trained to use is, in a substantial minority of cases, leading them to the wrong answer.
What the FCA is asking
The Discussion Paper poses several open questions, including:
- Should the 51% Representative APR threshold be raised (so the headline number is offered to a larger majority of accepted applicants)?
- Should firms be required to display the APR range (rather than just the representative figure) so consumers see what they might actually be offered?
- Should total repayment figures (the actual pounds and pence the customer will pay over the life of the agreement) be shown alongside APR, or in some cases replace it as the headline?
- Are there particular credit products (BNPL, short-term high-cost credit, credit cards, car finance) where APR is more or less useful?
- What role should price-comparison websites play in displaying credit costs?
The Discussion Paper does not propose a single answer. It is genuinely a discussion, intended to inform a later consultation on the future shape of credit advertising rules. That makes it lower-stakes than CP26/15 itself (which is asking for specific responses on specific proposals) but more interesting as a signal of where the FCA’s thinking is heading.
Where this leaves borrowers in the meantime
Until the new rules are finalised and in force (realistically late 2027 at the earliest, more likely 2028), the existing CONC Chapter 3 regime continues to apply. So you will continue to see Representative APR on credit adverts. The practical implications of the consultation for borrowers right now:
Do not over-rely on the headline APR
It is a useful starting point for comparing similar products. But for any significant credit decision, ask the lender (or look in the pre-contract information) for:
- The total amount you will repay over the life of the agreement.
- The full breakdown of fees (arrangement, broker, monthly, settlement, late).
- The personal APR you are being offered, not the representative figure (you have a right to this before signing).
- The total cost of credit (interest plus fees) as a separate figure.
Pre-contract information is more useful than the advert
Once you are at the application stage, the lender has to give you a Pre-Contract Credit Information (PCCI) document with detailed figures specific to your application. That is the document to compare across lenders if you are serious about finding the cheapest deal. The advert is the headline; the PCCI is the menu.
Watch for the 51% effect
The Representative APR you saw in the advert may not be the rate you are actually offered. If your credit score is weaker than the lender’s typical accepted profile, you can be offered a higher APR than the advertised rate without the lender having broken any rules. This is a known feature of the current system. The PCCI will tell you the truth specific to you.
What might change once the new rules land
Speculating responsibly about the post-consultation world:
- Total repayment figures could become the new headline. “£12,450 total repayable over 48 months” arguably communicates the price of credit more directly than “Representative 7.4% APR”.
- APR ranges may become standard. Adverts might display “Personal APR 6.9% to 27.9%, Representative 9.9%”, showing borrowers the spread of what they might be offered.
- Format-specific risk warnings. Social media credit promotions are likely to have a smaller set of mandatory disclosures, but more emphasis on whether the promotion overall is fair, clear, and not misleading.
- More FCA enforcement on outcomes. The Consumer Duty already requires firms to track customer outcomes. Expect more action against firms whose customer base shows signs of poor outcomes (high default rates, high complaints, evidence of customer misunderstanding).
- Price-comparison sites in scope. The Consumer Duty arguably already applies to credit comparison sites; the new rules may make that more explicit.
None of this is settled. The consultation closes on 17 June 2026; the FCA will respond later in 2026 or early 2027; final rules and an implementation period will follow. So the actual changes you see at the checkout are some way off.
The wider regulatory context
CP26/15 is one of several FCA workstreams cleaning up older consumer credit rules in light of the Consumer Duty. Companion reforms in scope or recently completed include:
- BNPL regulation from 15 July 2026 (Regulation Day), which brings Buy Now Pay Later into the FCA perimeter for the first time and applies financial promotions rules to it.
- Motor finance redress scheme, currently delayed by legal challenges but the underlying policy work continues.
- Safeguarding rules for e-money and payment firms (in force 7 May 2026 under PS25/12).
- Long-term direction on credit card minimum payments (debated for years, with the FCA periodically signalling further work).
Taken together, the post-Consumer Duty regulatory programme is the most significant reset of UK consumer credit rules in a decade.
How to respond to the consultation
The FCA explicitly welcomes responses from consumer organisations and individual consumers, not just industry. If you have a view on how credit is advertised and whether APR is helpful, the route is:
- Read the consultation paper on the FCA website (linked below).
- Submit a response in writing by 17 June 2026. Responses can be brief and focused; you do not need to address every question.
- Submissions can be made by email to the address in the consultation document.
FAQ
Will my existing credit agreements be affected?
No. The consultation is about how lenders advertise new credit. Existing credit agreements continue under their original terms. The changes, when they happen, will affect adverts, comparison sites, and pre-application materials for new agreements.
Does this mean APR is being scrapped?
Almost certainly not. APR is a statutory concept in the Consumer Credit (Disclosure of Information) Regulations 2010 and the Consumer Credit Directive (under retained EU law). What the FCA is consulting on is how APR is presented, alongside what other figures, and with what context. The headline APR figure will probably still exist.
If APR is unreliable, what should I use instead?
For a serious credit decision, look at the total amount payable, the monthly payment, and the total cost of credit (interest plus fees). Combined with the APR, those figures give a much better picture than the APR alone. The pre-contract information document is the source.
Does this apply to mortgages?
No. Mortgages have a separate regulatory regime (MCOB, the Mortgages and Home Finance Conduct of Business sourcebook) and their own consultations. CP26/15 is about unsecured consumer credit (loans, credit cards, car finance, BNPL) under CONC.
Will my credit score be affected?
The consultation does not directly change credit scoring. Credit reference agencies (Experian, Equifax, TransUnion) make their own decisions about what data feeds into a credit score. The proposals here are about disclosure and advertising, not about underwriting.
Where to go from here
- FCA Consultation Paper CP26/15: fca.org.uk – CP26/15
- FCA Discussion Paper on APR (alongside CP26/15): fca.org.uk – reviewing APRs
- Consumer Duty: fca.org.uk – Consumer Duty
- MoneyHelper guidance on borrowing: moneyhelper.org.uk
This article explains the FCA’s CP26/15 consultation and the companion APR Discussion Paper as of 13 May 2026. It is general information, not personal advice. If you are considering taking out credit, the most useful source for your specific situation is the lender’s pre-contract information document.
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