The FCA Consumer Duty -- introduced in July 2023 -- has fundamentally changed the obligations of every UK lender and debt recovery specialist. It is not a one-off compliance exercise. It is a continuous standard that governs every customer interaction, including debt recovery and asset repossession. Here is what every lender needs to understand in 2026.
The Consumer Duty requires firms to deliver good outcomes for retail customers across four key areas: Products and Services (are they fit for purpose?); Price and Value (do customers receive fair value?); Consumer Understanding (can customers understand what they have signed up to?); and Consumer Support (do customers receive adequate support when they need it?). In the context of debt recovery, the Consumer Duty has the most direct impact on Consumer Support and Consumer Understanding.
The practical implications are significant. Lenders must ensure that collections and recovery processes do not cause foreseeable harm to customers. This means: vulnerable customers must be identified and treated appropriately; communication must be clear, fair, and not misleading; enforcement action must be proportionate to the customer's circumstances; and recovery agents must be properly briefed, trained, and monitored for Consumer Duty compliance.
Towerhall Solutions has operated a Consumer Duty-aligned approach since before it became a regulatory requirement -- it is embedded in our Integrity Without Exception philosophy. In practice this means: all field agents are trained in vulnerability identification and are empowered to pause or modify the recovery approach if vulnerability is identified; our Re-Engage system uses digital channels and low-pressure communication to re-establish contact with customers in a way that respects their circumstances; every case is documented to create a compliant audit trail; and our client portal provides lenders with real-time visibility of every case action.
In 2025, the value of confiscation orders obtained by the FCA rose to 6.88 million, signalling a clear move toward targeting higher-value failures in systems and controls. Lenders who instruct unregulated or non-Consumer Duty-compliant recovery agents face not only FCA enforcement risk but also significant reputational exposure. In an era of social media and instant news, a single high-profile complaint about a poorly handled repossession can cause lasting brand damage.
The best firms in this space have recognised that Consumer Duty is not just a compliance burden -- it is a competitive advantage. A lender that is known for fair, professional, and empathetic handling of arrears retains more customers, generates fewer complaints, and builds a reputation that supports future lending. At Towerhall Solutions, we help lenders achieve this balance.
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