Guidance updated on information provided to repeat overdraft users in financial difficulty

The Financial Conduct Authority has updated its guidance for firms dealing with repeat overdraft users who show signs of financial difficulty. The change, dated 26 June 2026, sits in CONC 5D.3 of the FCA Handbook, the section covering interventions to be taken in the case of repeat users¹.

The new guidance, CONC 5D.3.3G, takes effect on 26 June 2026¹. It directs firms that once they identify a customer who both has a pattern of repeat overdraft use and shows signs of actual or potential financial difficulties, they should promptly provide information to that customer and, where appropriate, follow further communication guidance¹. The rules it sits alongside carry earlier dates: CONC 5D.3.1R is marked 18/12/2019 and CONC 5D.3.2R is marked 04/11/2024¹.

Under the existing rules, a firm that identifies such a customer must promptly communicate with them, highlight their pattern of overdraft use, indicate that it may be causing high avoidable costs, encourage them to make contact and explain that doing nothing could make things worse¹. If the customer does not respond within a reasonable period, the firm must take reasonable steps to contact them, explore the reasons for the overdraft use and the financial difficulties, and set out suitable options¹. The guidance states that a "reasonable period" for these purposes is unlikely to be longer than one month¹.

The guidance lists options a firm could identify where assessed as appropriate, including advice on budgeting and money management, such as adjusting payment dates or setting up alerts, and forbearance such as reducing or waiving interest and charges, refinancing the overdraft debt, or agreeing staged reductions in the limit and balance¹. A reduction in the credit limit or suspension or removal of the overdraft facility is also listed, provided it would not cause financial hardship¹.

The guidance also states that the section does not specify a particular form of words, and that firms have discretion to tailor the language and tone to the individual customer's circumstances¹. It adds that where a customer is already being treated with appropriate forbearance, the rules do not require a firm to do anything inconsistent with that treatment, and that where a Debt Respite moratorium is in effect for an overdraft, the firm is not required to take these steps in relation to that debt during the moratorium¹.

Why it matters for households

The guidance applies to people who use an overdraft repeatedly and who show signs of actual or potential financial difficulty, as identified by their bank¹. For those customers, the practical effect is that the bank should make contact promptly, explain the pattern of use and set out options, rather than leaving the arrangement to continue unaddressed¹.

The rules already allow a firm to consider suspending or removing an overdraft facility or reducing a credit limit where a customer does not engage or act, but not where doing so would cause financial hardship¹. The guidance reminds firms to give careful thought to the potential effect of those steps¹. The updated guidance also points firms to the provision of information covering the customer's financial position, credit file reporting and options, and to supporting engagement through appropriate channels¹.

The guidance does not change the underlying rules, which carry the dates 18/12/2019 and 04/11/2024, and it does not set out a fixed form of words for banks to use¹. It applies from 26 June 2026¹.