Consumer Credit Act Reform 2026: What the Overhaul Means for Credit Cards, Loans and Borrowers

REGULATION | CONSUMER CREDIT

Why the Consumer Credit Act is being reformed

The Consumer Credit Act 1974 has governed borrowing in the UK for 50 years. When it was passed, there were no mobile apps, no online checkouts, no instant credit decisions, and no BNPL services. Its prescriptive requirements - specifying exactly what information must appear in credit agreements, in what order, in what format, with what font size - were designed for paper documents in an analogue world.

HM Treasury's assessment is that the Act has become "prescriptive, confusing and duplicative", requiring credit providers to use technical language that consumers may not understand, and creating barriers to innovative new digital products that could serve customers better. The government's policy is to move detailed rule-setting responsibility from primary legislation to the FCA, which can update its rulebook faster and design requirements that achieve better consumer outcomes rather than technical compliance with 1970s-era form requirements.

What is actually changing

The Financial Services and Markets Bill 2026, introduced in the House of Lords on 19 May 2026, will create the legislative framework for the transition. Most of the CCA's detailed information requirements - what must appear in pre-contract information documents, credit agreements, and statements - will be repealed from the Act and recast as FCA rules.

The FCA has confirmed it will consult on replacement rules once the legislation is passed, taking an approach underpinned by the Consumer Duty (the overarching principle that firms must deliver good outcomes for retail customers). This means the new rules are likely to focus on whether consumers genuinely understand the credit they are taking on, rather than whether a specific form of words appeared in a specific place in a document.

What is being kept in law

Two of the most important consumer protections in the CCA are being retained in primary legislation rather than delegated to the FCA rulebook. This matters because primary legislation changes require an Act of Parliament, giving these rights stronger long-term protection than FCA rules which can be changed through regulatory process.

Section 75 of the CCA makes a lender jointly liable with a supplier if a consumer has a valid claim against the supplier for misrepresentation or breach of contract on a purchase costing between £100 and £30,000 made using a credit card or regulated credit. This right will remain in legislation.

Section 140A of the CCA allows a court to examine whether a credit relationship is unfair to the borrower and to reopen the agreement if so. This is the legal mechanism underlying the motor finance mis-selling redress scheme and similar compensation claims. It is also being retained in legislation.

What is being removed - and why it matters

The unenforceability sanctions are being repealed. Under the current CCA, a failure to comply with certain technical information requirements can make a debt legally unenforceable - meaning the lender cannot take court action to recover it. This provision has historically been used by borrowers and debt specialists to challenge agreements where lenders have made technical documentation errors, even where the borrower received credit and owes a genuine debt.

HM Treasury's view is that these sanctions are "out of step with modern regulation" and unnecessary given the broader consumer protection framework, including the FCA's enforcement powers, the FOS, and Consumer Duty obligations. Consumer groups have expressed concern that removing unenforceability removes a significant deterrent to non-compliance by lenders.

Criminal offences under the CCA are also being repealed. The FCA's existing enforcement powers - which include fines, banning orders, and prosecution for market abuse - will replace them.

Timeline

What borrowers should do now

For most consumers taking out credit cards, personal loans or overdrafts, nothing changes immediately. The existing CCA protections remain fully in force until the legislation passes and the FCA implements replacement rules - a process that will take years, not months.

The most important current protections - Section 75 for purchases on credit, the right to challenge unfair credit relationships, and access to the Financial Ombudsman Service - are either being retained in legislation or sit within the FCA's existing rulebook independently of the CCA reform.

Anyone with concerns about an existing credit agreement should check the FCA's consumer credit guidance and, where relevant, consider whether they have a complaint to make through the firm's complaint process or the FOS now, rather than waiting for the regulatory framework to change.

Frequently asked questions

Will my credit card Section 75 rights change?

No. Section 75 is being retained in primary legislation. Your right to claim from your credit card provider if a supplier fails to deliver or misrepresents a purchase costing between £100 and £30,000 is not affected by the CCA reform.

Can I still challenge an unfair credit agreement?

Yes. Section 140A of the CCA, which allows courts to examine whether a credit relationship is unfair to the borrower, is being retained in legislation. If you believe you have been treated unfairly by a lender, the first step is a formal complaint to the lender, followed by the Financial Ombudsman Service if unresolved.

Does this affect car finance claims?

The motor finance mis-selling redress scheme is based on Section 140A of the CCA and Supreme Court case law on commission disclosure. Since Section 140A is being retained in legislation, the legal basis for existing car finance claims is not affected by the CCA reform. The FCA's redress scheme continues on its current track.

Where can I find the official legislation?

The Financial Services and Markets Bill 2026 is tracked at bills.parliament.uk. The HM Treasury Policy Statement on CCA reform is published at GOV.UK.