As a credit broker in the UK, compliance is more than a regulatory obligation—it’s a critical component of building trust, avoiding enforcement action, and running a successful business. The Financial Conduct Authority (FCA) sets out strict requirements to ensure that credit brokers operate ethically, transparently, and in the best interest of consumers.
However, many firms—particularly new or fast-growing ones—make common compliance mistakes that can lead to serious consequences, including fines, reputational damage, or even licence revocation. In this guide, we explore the most frequent compliance pitfalls and how your firm can avoid them.
Some credit brokers dive into the business without fully understanding the FCA requirements for credit broking firms. They may assume that basic knowledge of financial products is enough and overlook key areas such as conduct rules, disclosure obligations, and the need for a robust compliance monitoring framework.
Before offering any credit broking services, review the FCA Handbook, particularly the CONC (Consumer Credit Sourcebook) rules. Familiarise yourself with the FCA’s expectations on responsible lending, treating customers fairly, and conducting affordability checks. Consider working with a professional FCA-approved compliance consultant for credit brokers to ensure your interpretation of the rules is accurate and up to date.
A common area of non-compliance involves advertising. Some firms publish financial promotions that are misleading, unclear, or non-compliant with FCA guidelines. For instance, failing to disclose that you're a credit broker (not a lender) or implying guaranteed approval are serious breaches.
Follow FCA advertising rules closely. All promotional material—whether it's on your website, social media, or PPC ads—must be clear, fair, and not misleading. Always state your FCA authorisation status and explain your role in the credit process. When in doubt, have your advertising copy reviewed by a compliance expert or legal professional.
Some brokers fail to carry out proper affordability and suitability assessments before connecting customers with lenders. This can result in consumers taking on unaffordable credit and increases the risk of complaints or FCA enforcement action.
Create and implement a clear affordability assessment process. Work with lenders who also follow responsible lending practices. Maintain detailed records of every assessment you conduct and ensure your team is trained to spot red flags, such as high debt-to-income ratios or signs of financial vulnerability.
A surprising number of brokers do not have an effective compliance monitoring system in place. This means issues go unnoticed until it’s too late—often during an FCA audit or after customer complaints.
Develop a robust compliance monitoring plan that outlines how your firm will track, assess, and improve regulatory adherence. This should include periodic reviews of your sales processes, call scripts, advertising, and customer communications. Appoint a compliance officer or work with an external consultant to oversee ongoing monitoring.
Ignoring or mismanaging customer complaints can lead to FCA scrutiny and complaints being escalated to the Financial Ombudsman Service (FOS). Many brokers do not have a formal complaints procedure or fail to respond within the required timeframes.
Set up a formal complaints handling process that complies with FCA DISP rules. Acknowledge complaints promptly, investigate thoroughly, and provide a final response within 8 weeks. Maintain a complaints log and use complaint data to identify areas for improvement. Remember, how you handle complaints is a reflection of your overall compliance culture.
Some brokers fail to maintain sufficient records to prove compliance. This includes customer communications, affordability checks, disclosures, and staff training. Without evidence, it’s hard to demonstrate that you’ve acted in line with FCA rules.
Implement a robust document management system that stores all compliance-related documentation. Ensure your CRM and onboarding tools allow you to track interactions and evidence key compliance steps, such as consent collection and suitability assessments.
Policies written at the start of the business often become outdated and irrelevant. Regulatory updates, product changes, and new consumer expectations all require adjustments in compliance procedures.
Regularly review and update your internal compliance policies and procedures—ideally on a quarterly basis or after significant regulatory announcements. This ensures your business stays aligned with the latest FCA guidance and avoids unintentional breaches.
Compliance is not just the job of your compliance officer. If your team doesn't understand their obligations or the importance of treating customers fairly, you're at risk of systemic compliance failure.
Provide regular compliance training for all staff—especially customer-facing teams. Use real-world case studies, internal audits, and FCA enforcement actions to bring compliance lessons to life. Make compliance a core part of your company culture.
Some credit brokers forget to complete required steps for maintaining their FCA authorisation, such as submitting annual returns, paying fees, or notifying the FCA of material changes in the business.
Use a compliance calendar to track regulatory deadlines and obligations. Ensure your contact information with the FCA is current so you never miss important updates or alerts. Work with a compliance consultant if you’re unsure of your responsibilities.
Trying to manage compliance without expert help can be risky—especially as regulations evolve and the FCA increases its scrutiny of consumer credit firms.
Engage with a FCA-approved compliance consultant for credit brokers. They can help with your compliance checklist, review your processes, support with FCA authorisation, and assist with handling audits or regulatory change. The right consultant can help your business grow while staying compliant and protecting your reputation.
Running a compliant credit broking business takes more than good intentions—it requires ongoing education, monitoring, and support. By avoiding these common mistakes and embedding compliance into your operations, you not only reduce regulatory risk but also build trust with consumers and partners.
If you're unsure where to start, working with an experienced compliance partner can give you the peace of mind that you're meeting all FCA requirements for credit broking firms. At Authorised Compliance, we help brokers navigate these challenges every day—get in touch to see how we can help you build a stronger, more resilient business.
Authorised Compliance Ltd is a company incorporated in England & Wales, with company registration number: 15833435.Our registered address is: The Motorworks, Chestergate, Macclesfield, England, SK11 6DU.We are not currently authorised or regulated by the Financial Conduct Authority (FCA).We are registered with the Information Commissioner’s Office under registration reference C1588780.
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