FCA updates P2P creditworthiness assessment guidance on financial difficulties and vulnerability

The Financial Conduct Authority has updated its Handbook guidance on creditworthiness assessment for peer-to-peer (P2P) lending, with new material dated 4 November 2024. The change sits in CONC 5.5A, the section of the consumer credit sourcebook that applies to firms operating an electronic system in relation to lending, rather than to lenders themselves¹.

The new provision is CONC 5.5A.23, marked as guidance and dated 04/11/2024¹. It requires firms to have regard to information indicating that the borrower is in financial difficulties or is vulnerable. The surrounding section, CONC 5.5A, was last updated on 04/11/2024¹. Its core rules are older: CONC 5.5A.1, which sets out the application of the section, and CONC 5.5A.34 are both dated 01/11/2018¹.

The same 4 November 2024 date appears on guidance in a separate part of the Handbook covering post-contract business practices. CONC 6.7.3B, dated 04/11/2024, sets out circumstances in which there are signs of actual or possible financial difficulties for credit card and retail revolving credit customers, and examples of appropriate action by firms². Those examples include considering suspending, reducing, waiving or cancelling further interest, fees or charges, accepting token payments for a reasonable period, notifying the customer of the risk of escalating debt, and providing contact details for not-for-profit debt advice bodies². The guidance states that a customer paying only the minimum required amount is not, by itself, a sign of possible or actual financial difficulties, though it may be where a customer with a pattern of paying more than the minimum reduces payments to the minimum while continuing to draw down credit².

CONC 6.7.3B also cross-refers to CONC 1.3.1G(1) to (7), the Handbook's guidance on financial difficulties². The text of CONC 1.3.1G is not reproduced in the pages reviewed here.

The creditworthiness assessment rules for consumer credit lending, in CONC 5.2A, carry the same 04/11/2024 update date, with CONC 5.2A.22 dated 04/11/2024⁴. That section requires a firm to undertake a reasonable assessment of a customer's creditworthiness before entering into a regulated credit agreement, significantly increasing the amount of credit, or significantly increasing a credit limit⁴. It requires the firm to consider both credit risk and affordability risk, and to base the assessment on sufficient information⁴. Among the factors listed for deciding what steps are needed is that the customer is vulnerable, for example because the customer has mental health difficulties or mental capacity limitations⁵.

Why it matters for households

The guidance applies to firms operating P2P lending platforms, which sit between people lending money and people borrowing it. Under CONC 5.5A, the platform operator, not only the lender, has an obligation to carry out a creditworthiness assessment¹. Where both CONC 5.2A and CONC 5.5A apply, the Handbook states that each party is subject to a separate obligation to undertake an assessment, while noting that firms may outsource operational functions under SYSC 8 and remain fully responsible for their obligations¹.

For borrowers, the practical effect of the 4 November 2024 guidance is that a P2P firm is directed to take account of information showing financial difficulties or vulnerability when assessing creditworthiness. The related post-contract guidance for credit cards and retail revolving credit describes what firms may do when difficulties appear, including reducing or waiving interest, fees or charges and accepting token payments². The Handbook does not state in these pages that the guidance changes the underlying rules, most of which date from 2018¹.

What happens next

No implementation date, consultation or transitional arrangement is set out in the pages reviewed. The Handbook records CONC 6.7 as last updated on 15/07/2026, with entries dated 26/06/2026 and 15/07/2026². No further FCA announcement on this guidance has been reported.