FCA publishes Research Note informing CONC 3 cost disclosure review

The Financial Conduct Authority published a research note on 29 April 2026 setting out the results of an online experiment into how different cost-of-credit disclosures affect consumers' ability to compare credit products¹. The regulator says the findings "have informed the FCA's Discussion Paper on cost disclosure requirements in CONC 3 (the FCA's rules on financial promotions for consumer credit)"¹. It describes the note as part of a coordinated package of research and discussion papers initiated as part of its review of the CONC 3 financial promotions rules for consumer credit¹.

The experiment recruited 14,766 participants through an online panel provider, Critical, with an attrition rate of 25.6%¹. Participants who completed the task in under 120 seconds (59 people) or over one hour (67 people) were excluded¹. The FCA states that "the CONC 3 review aims to remove complex and outdated requirements or those that may be unnecessary or duplicative in light of the Duty", referring to the Consumer Duty, which "came into force in July 2023"¹.

On understanding, fewer than one in five participants (18%) answered all three understanding questions correctly, while a majority (53%) answered no more than one question correctly¹. A majority (61%) of those shown only APRs applied a "low APR = low total cost" heuristic, treating the lower-APR product as cheaper regardless of actual total cost¹. More than 80% of participants shown only APRs correctly identified the lower total cost product in Pairs 1 and 2, but only 17% did so in Pair 3, where the lower-APR product cost more to repay in total¹.

The effect of adding the total amount repayable alongside APRs varied by comparison:

Source: FCA research note, 29 April 2026¹

The FCA reports that adding the total amount repayable increased correct identification by between 4pp and 53pp across all comparisons, and increased the likelihood of reporting confidence by 4 to 11pp¹. Even with that information, 25% of participants still incorrectly reported that the lower-APR product would cost less to repay in Pair 3¹. Other £-based metrics, such as monthly repayment amounts and repayment per £ borrowed, had a limited and mixed impact on comparability¹. An added explanation of how repayment duration affects total cost improved the proportion who correctly identified the definition of APR, but the FCA says this did not translate into a greater ability to identify the lower total cost product¹. That information produced a small but statistically significant decline in performance in Pair 2 (-3pp)¹. Non-standardised disclosure, where different cost metrics were shown for each product, impaired participants' ability to identify the lower total cost product in Pair 1 (-40pp) and Pair 2 (-15pp), while a non-standard treatment improved performance by 31pp¹.

Why it matters for households

The research concerns the information people see when credit is advertised, including high-cost credit such as payday loans and rent-to-own, and other consumer credit covered by CONC 3¹. The findings suggest that the APR, the headline figure borrowers most often see, is widely misunderstood: 18% of participants answered all three understanding questions correctly¹. Where the lower-APR product was in fact more expensive overall, only 17% of those shown APRs alone identified the cheaper option¹. The FCA's evidence indicates that showing the total amount repayable alongside the APR improved identification of the lower total cost product, by 4pp to 53pp depending on the comparison¹. Any change to what lenders and brokers must display would follow from the CONC 3 review, not from this note, and the FCA has not announced new requirements in it¹. The note states that market outcomes will also depend on how firms respond to competition and regulation, and that research notes do not necessarily represent the FCA's position¹.

What happens next

The FCA says the discussion paper on cost disclosure requirements in CONC 3 has been published alongside the research note¹. The note forms part of a package of research and discussion or consultation papers under the CONC 3 review¹. The FCA has not reported in this note when any rule changes would take effect. How the consultation process proceeds, and whether the FCA's proposals change, has not been reported in the note.