CP18/12 and CP18/13: Consultations on High-cost Credit and on Overdrafts

As part of our ongoing review of high-cost credit products, we are publishing our proposed rules and guidance for consultation. We have also identified a number of areas for discussion.

Show CP18/12 (PDF)

Show CP18/13 (PDF)

These documents follow on from our Feedback Statement (FS17/2), published in July 2017, and then our update, published in January 2018. These publications identified our key areas of concern and the way we are thinking about high-cost credit.

We have focused on arranged and unarranged overdrafts, as well as rent-to-own, home-collected credit and catalogue credit products. We have also included store cards.

We are also working on alternatives to high-cost credit. These are designed to increase choice and encourage the availability of alternatives.

Who this applies to 

This update will be of interest to:

  • banks and building societies that provide overdrafts
  • consumer credit lenders that provide overdrafts, home-collected credit, rent-to-own, and catalogue credit and store cards
  • credit unions and community development finance institutions and commercial innovators in alternatives to high-cost credit
  • trade bodies representing these firms
  • social investors, foundations  and other investors with an interest in alternative credit
  • local authorities and other social landlords
  • consumer organisations


We are publishing two consultation papers:

High-cost credit: CP18/12

This paper addresses rent-to-own, home-collected credit, catalogue credit and store cards, and alternatives to high-cost credit. It includes: 

  • proposals for consultation (chapters 2 to 5)
  • a discussion on rent-to-own pricing (chapter 2)
  • cost-benefit analysis for the proposals (annex 2)

Error: In Appendix 2 of the version of CP18/12 published 31 May 2018, we have updated the reference to the ‘by way of business test’ in paragraph 2.4. We have also inserted a footnote in para 2.3 to our perimeter guidance and an additional sentence in para 2.5 concerning the criminal offence of engaging in credit broking if unauthorised.

Overdrafts: CP18/13

This paper addresses arranged and unarranged overdrafts. It includes:

  • proposals for consultation (chapter 3)
  • a discussion on changes to overdraft charges (chapters 4 and 5) 
  • cost-benefit analysis for the proposals (annex 2)
  • a review of the monthly maximum charge for unarranged overdrafts (annex 3)

Video: consumer credit focus group

We have analysed a large amount of data, including millions of anonymised credit files, randomised controlled trials and extensive research and listened to high-cost credit customers. Andrew Bailey recently took part in a Glasgow focus group to hear people’s views and experiences of credit.

Next steps

We welcome your views on all the consultation proposals and the discussion questions on overdrafts (pricing intervention and repeat use) by 31 August 2018. The discussion questions on rent-to-own pricing are now closed to feedback.

Online response form for CP18/12

Online response form for CP18/13

You can also:

  • email your responses for any of the papers to their respective email address:
  • or write to:
    • current address – Neil Marshall and Sara Woodroffe, Strategy and Competition Division, Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS
    • new address from 1 July 2018 – Neil Marshall and Sara Woodroffe, Strategy and Competition Division, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN

Background research

We have used the following research and occasional papers to create our proposals: