Posted: 28th March 2019

On the 5th March 2019, the FCA wrote to all credit card firms following a review of how fees and charges are being applied to their customers.

For some years, the FCA has been exploring the risks of poor culture and practice in the assessment of affordability in the consumer credit sector.

The latest review, carried out during 2017 and 2018, gave the FCA an understanding of how credit card fees and charges affect customer outcomes. The main objective of this work was to find out whether firms had the right culture and practices to ensure that customers were being treated fairly when they make late payments, miss payments or go over their credit limit.

The FCA has found that some customers were being charged multiple times, which could indicate that firms are not identifying signs of potential financial difficulty early enough.

The impact of persistent debt on customers’ financial circumstances cannot be overstated. Customers who find themselves in unmanageable debt often feel overwhelmed by the situation, bury their heads in the sand and avoid opening mail from their creditors. This sad truth is clearly contrary to the FCA’s desire to see markets working well for customers.

When the regulator sees customers being charged multiple times, there is an obvious concern that they might be heading towards this kind of abyss. The FCA expects firms to play their part in helping customers avoid this at the earliest stage possible.

Firms are required to identify potential financial difficulty so that they can support the customer through a difficult time. There is a range of measures that firms could take, some of which are written into the Consumer Credit Sourcebook itself. Treating customers with forbearance and due consideration when they are in arrears or financial difficulty is a key requirement, spelled out explicitly.

Reducing, waiving, deferring or suspending fees can make an incredible difference to customers in financial difficulties. Not only does it help to minimise the impact of charges, thus limiting the compounding effect of charges on their increasing debt, it also shows customers that you are on their side. This supportive approach is critical when the customer might be feeling isolated and anxious.

Have you already made strides in the right direction?

Through our work with a number of key players within the industry, we’ve found that many credit card providers have already made huge strides towards putting customers at the heart of their business model. Customer service and complaints processes are areas in which it is possible to improve not only the customer’s experience, but also their outcome, and we have seen this happen time and time again in recent years. This is great news for customers, individual firms and the sector as a whole.

The FCA has acknowledged the work already done by firms in their sample population. For example, they have seen firms make several changes to their charges, including removing or capping fees and increasing communications with customers to prevent fees being charged in the first place. This action has led to consumer savings of over £80 million.

These steps are a positive sign that firms are understanding the regulator’s focus on customer outcomes and are seeking to work with customers – and the regulator itself – to build a better landscape in the consumer credit sector. This is to be applauded, as many people’s lives will have been made easier by these kinds of changes.


All firms are on a journey and there is always scope for more to be done. As you take stock of your firm’s place in this market, here are a few questions for you to mull over and consider honest answers to:

  • Does your firm’s culture drive staff to hold customer outcomes uppermost in their minds in their day-to-day work?
  • Do staff receive positive, customer-focused messages from management, internal communications and general comments from around the organisation?
  • Do your internal policies drive a supportive approach to customers in financial difficulties?
  • What triggers does your firm use to identify potential financial difficulties at the early stages, and do you need to review these to ensure these customers can be flagged up sooner?
  • Are your IT systems geared up to alert you where customers are repeatedly incurring fees?
  • Do you have a broad range of options from which your staff can offer tailored support to individual customers who are in financial difficulty?
  • Do your collections and recoveries operations work with customers in a supportive and collaborative way?
  • Do your customer communications convey the right messages to customers who may be feeling worried about their credit card debt?


Policies and processes should be under constant review, refined and adjusted regularly to ensure customers are placed, and remain, at the heart of the business.

Staff should be equipped and empowered to make judgements and decisions that bring about fair outcomes for customers. This could mean additional training, as well as putting the right tools and options at their disposal so that they can truly help their customers through periods of financial difficulty.

You may need to consider your existing customer communications in terms of when you begin to reach out to customers. The nature of these communications will be very important. People love sharing anecdotes about receiving threatening letters from banks and creditors, so don’t let yours come across as one of these. At each touchpoint, customers in financial difficulty need to believe that the firm they’re dealing with is genuinely interested in helping them resolve their problem debt.

Governance, oversight, communication strategy and IT functionality should all be considered when developing your customer focus, and each is equally important in improving customer outcomes. A meaningful suite of management information that can drive informed decision-making in a timely manner will underpin all of this.

Finally, firms need to be aware of their corporate culture and the messages that come across via internal communications, from the boardroom all the way down to the front-line, as well as horizontally across all business areas. The internal culture at your firm should be one that encourages putting the customer at the centre of decision making at every stage.

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