The Consumer Credit sourcebook Chapter 7 (CONC 7) represents one of the most comprehensive regulatory frameworks governing debt recovery in the UK. For financial institutions, banks, and professional recovery agencies like Towerhall Solutions, understanding and implementing CONC 7 requirements isn't just about compliance—it's about building sustainable, ethical recovery practices that protect both customers and business interests.
CONC 7 applies broadly across the financial services sector, covering firms engaged in consumer credit lending, consumer hiring, peer-to-peer lending operations, and debt collecting activities. The regulation extends beyond direct lenders to include any firm involved in the debt recovery process, making it particularly relevant for professional recovery agencies and their banking clients.
The framework recognizes that debt recovery involves vulnerable individuals facing financial difficulties, requiring a fundamentally different approach from standard commercial transactions. This recognition shapes every aspect of the regulation, from initial customer contact through to final resolution.
At the heart of CONC 7 lies the principle of treating customers with forbearance and due consideration. This goes far beyond simple politeness—it requires firms to genuinely consider individual customer circumstances and adapt their approach accordingly. When a customer falls into arrears, firms must assess whether this represents a temporary setback or indicates deeper financial difficulties requiring more substantial support.
The regulation explicitly requires firms to allow customers reasonable time and opportunity to repay debts, moving away from aggressive collection tactics toward collaborative problem-solving. This approach often proves more effective than traditional methods, as customers who feel supported rather than threatened are more likely to engage constructively with repayment arrangements.
CONC 7 places significant emphasis on identifying and supporting vulnerable customers, including those with mental health difficulties, mental capacity limitations, or other circumstances that affect their ability to manage financial decisions. Firms must establish clear policies for recognizing vulnerability indicators and responding appropriately.
When vulnerability is identified, the regulation requires firms to suspend active debt recovery while conducting thorough assessments of the customer's circumstances. This might involve accepting reduced payments, extending repayment periods, or referring customers to appropriate support services. The key principle is that recovery actions must be proportionate to both the debt amount and the customer's capacity to pay.
The regulation demands that all recovery actions be proportionate to the circumstances. This means considering factors such as the debt amount, the customer's payment history, their current financial situation, and any vulnerability factors. A £100 debt cannot justify the same level of recovery activity as a £10,000 debt, and a customer experiencing temporary unemployment requires different treatment from someone who has consistently avoided payment obligations.
CONC 7 specifically prohibits firms from pressuring customers to pay debts in unreasonably large amounts or within unreasonably short timeframes. Instead, firms must work with customers to develop sustainable repayment arrangements that allow for essential living expenses and priority debt payments such as mortgage, rent, and utility bills.
The regulation sets detailed standards for customer communication, requiring all contact to be clear, fair, and not misleading. Firms must explain who they are, their relationship to the debt, and the purpose of their contact. Communications must not be designed to mislead customers about the urgency or consequences of non-payment.
Timing of contact is also regulated, with firms required to respect reasonable requests about when and how customers prefer to be contacted. This might include avoiding contact during working hours for shift workers or using specific communication methods that accommodate disabilities or language barriers.
CONC 7 mandates comprehensive record-keeping throughout the recovery process. Firms must document all customer interactions, decisions made, vulnerability assessments conducted, and outcomes achieved. This documentation serves multiple purposes: ensuring consistent treatment, providing evidence of compliant behavior, and enabling effective case management.
The regulation requires firms to maintain accurate data about debt amounts, payment histories, and customer circumstances. When pursuing recovery, firms must be able to demonstrate that they are pursuing the correct person for the correct amount, with proper evidence supporting their claim.
For high-cost short-term credit, CONC 7 imposes strict limitations on the use of continuous payment authorities. Firms can only make two attempts to collect payments under such authorities before being required to contact the customer and obtain fresh consent. This prevents the repeated failed payment attempts that can exacerbate financial difficulties for struggling customers.
The regulation also requires firms to exercise continuous payment authorities reasonably and proportionately, considering the customer's likely financial circumstances and avoiding attempts when insufficient funds are available for essential expenses.
As an FCA-regulated debt recovery specialist, Towerhall Solutions has built comprehensive systems to ensure full CONC 7 compliance across all operations. Our approach begins with thorough vulnerability assessments for every case, using both automated screening tools and experienced advisor judgment to identify customers requiring additional support.
Our recovery strategies are designed around the principle of proportionate action, with different approaches for different debt types and customer circumstances. We maintain detailed documentation of all decisions and actions, providing complete audit trails that demonstrate compliant behavior and support regulatory reviews.
Technology plays a crucial role in our compliance framework, with systems that automatically flag potential vulnerability indicators, monitor communication frequency and timing, and ensure all customer interactions meet regulatory standards. This technological foundation supports our experienced recovery specialists in delivering both effective outcomes and exemplary customer treatment.
While CONC 7 compliance requires investment in systems, training, and processes, it delivers significant business benefits. Customers who feel fairly treated are more likely to engage with repayment arrangements and maintain relationships with creditors. This leads to higher recovery rates, reduced complaint levels, and improved long-term customer value.
Compliance also provides protection against regulatory action, which can result in significant fines, operational restrictions, and reputational damage. The FCA has demonstrated its willingness to take strong action against firms that fail to meet CONC 7 standards, making compliance a business-critical requirement rather than an optional enhancement.
CONC 7 continues to evolve as the FCA refines its expectations and responds to changing market conditions. Recent updates have strengthened protections for vulnerable customers and enhanced requirements for outcome monitoring. Firms must stay current with these developments and adapt their practices accordingly.
The trend toward outcome-focused regulation means that compliance is increasingly measured by customer outcomes rather than process adherence. This shift rewards firms that genuinely prioritize customer welfare while maintaining effective recovery operations.
For financial institutions and recovery agencies, CONC 7 compliance represents both a regulatory requirement and a competitive advantage. Organizations that embrace these standards and implement them effectively will find themselves better positioned for sustainable success in an increasingly regulated environment.
Need expert CONC 7 compliance support? Towerhall Solutions combines deep regulatory knowledge with practical implementation expertise to help financial institutions achieve full compliance while maintaining effective recovery outcomes.
Call: 01342 718300
Email: info@towerhallsolutions.com
Towerhall Solutions Ltd is authorised and regulated by the Financial Conduct Authority (FCA Reg No. 621912).
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