Following the FCA’s Consumer Duty review (FS25/2) and as mentioned in the Regulatory Initiatives Grid, the regulator plans to simplify CONC 3, removing unnecessary prescription, updating outdated requirements, and aligning with the Consumer Duty’s Consumer Understanding outcome. A consultation is expected in H1 2026, and the industry has a real opportunity to influence what comes next.

What’s driving this?

The introduction on the Consumer Duty marked a long overdue change in direction from the FCA. A move away from prescriptive rules, towards principles-based and outcomes focussed regulation. The FCA wants to promote:

• Greater flexibility: Giving firms scope to innovate and tailor approaches, especially for customers with vulnerabilities;
• Predictability: Clearer priorities and timelines to help firms plan ahead; and
• Improved efficiency: Cutting complexity and cost while ensuring good outcomes.

The intention is that, in future, instead of asking “Did you include the right words?” the question will be “Does your promotion actually help customers make sense of the product?”. That’s a big shift, and a welcome one.

Themes the FCA is exploring

We understand the FCA is exploring some big-ticket items, including:

• APR triggers: Should they stay or go? If they go, when do APRs still matter?
• Short-term lending: Does APR tell the truth in this context, or just scare people off?
• Risk-based pricing: Is the 51% threshold for representative APR still fit for purpose?
• Terminology tweaks: Is calling an APR “representative” meaningful in all situations? Is “typical” more accurate?
• Representative examples: Do they aid understanding, or just add complexity? Should firms have more discretion on when to include them?

In short, the FCA seems ready to challenge long-standing norms.

What could the new world look like?

In our view, this is a real opportunity to make changes for the better. But this needs to be a root and branch overhaul; tweaking CONC 3 around the edges just won’t cut it. Imagine a system where clarity beats complexity and firms are trusted to innovate without tripping over red tape. In our view, the best approach would be to start with Consumer Duty as the anchor, where:

• Customer understanding drives everything: ads must genuinely help consumers make informed decisions.
• There are limited prescriptive rules: instead of pages of prescription, expect a handful of baseline requirements for clarity and fairness.
• With prominence by principle: if customers can’t see or understand it, you fail the Consumer Duty.
• There is a thorough review of what really works (including APRs and representative examples): taking learnings from experts in the field to understand the information customers really want (and what they understand). We’re aware of some great work going on in this space by Plain Numbers and others.

What you need to do

The future of financial promotions is simpler, smarter, and built around real consumer understanding. The question isn’t if change is coming, it’s whether you’ll help shape it or just react when it lands.

The FCA is listening. Now is the time to:

• Get involved through your trade associations: Share your views on APRs, representative examples, terminology, and what clarity really looks like.
• Be ready for the consultation: When the paper drops, make sure your feedback counts.

This is more than compliance. It’s a chance to influence a system that works better for firms and customers alike. Don’t wait for the rulebook to be rewritten without your input.

How we can help you

Our Regulatory team advises lenders, intermediaries and retail finance firms on navigating the fast‑moving FCA landscape. With former regulators and specialists in Consumer Duty implementation, financial promotions, and credit regulation, we help clients to anticipate change rather than react to it.

Whether you need to review your current promotions, assess how the FCA’s proposed reforms could affect your products, or shape your response to the upcoming consultation, we can provide clear, strategic support.

For further guidance, please contact Leanna Bradshaw or any member of our Regulatory team.