Finance
UK's FCA urges second-mortgage providers to address consumer protection gaps
Published by Global Banking & Finance Review®
Posted on March 12, 2026
1 min readLast updated: March 12, 2026
Quick Summary
The UK’s Financial Conduct Authority (FCA) has called on second‑charge mortgage providers to strengthen consumer protections following its review, which revealed unclear fees, poor record‑keeping, affordability checks that ignore living costs and a push toward debt consolidation without proper clari
FCA Calls on UK's Second Mortgage Providers to Improve Consumer Protections
FCA Review Highlights Risks and Calls for Improved Practices
March 12 (Reuters) - Britain's Financial Conduct Authority (FCA) on Thursday called on second charge mortgage firms to improve consumer protections after a review found risks of financial harm to borrowers.
Key Findings from the FCA Review
Unclear Fees and Charges
The FCA's review found issues related to unclear fees, inadequate record-keeping, affordability assessments that overlooked living costs and steered consumers towards debt consolidation without clarification.
Inadequate Record-Keeping
Impact on Consumer Transparency
Affordability Assessments
Overlooking Living Costs
Debt Consolidation Practices
Lack of Clarification for Borrowers
(Reporting by Nithyashree R B in Bengaluru; Editing by Maju Samuel)
Key Takeaways
- •FCA review highlights key risks: ambiguous charges, inadequate affordability assessments, record‑keeping gaps and steering borrowers into consolidation without clear guidance.
- •Second‑charge mortgage advice is shrinking—2023 adviser numbers down 10% since pre‑pandemic—raising concerns over market capacity to meet FCA standards (mortgagesolutions.co.uk).
- •Experts caution that second‑charge mortgages often come with much higher interest and long repayment terms, increasing repossession risk and household cost pressure (moneyweek.com)
References
Frequently Asked Questions about UK's FCA urges second-mortgage providers to address consumer protection gaps
1What did the FCA's review of second mortgage providers find?
The FCA found issues like unclear fees, inadequate record-keeping, poor affordability checks, and inadequate guidance for borrowers.
2What risks did the FCA identify for second mortgage borrowers?
The FCA identified financial harm risks due to unclear fees and affordability assessments that overlooked living costs.
3How are second mortgage providers steering consumers?
Some providers steered consumers towards debt consolidation without proper clarification and transparency.
4What action is the FCA urging from second mortgage firms?
The FCA is urging firms to improve consumer protections and address identified gaps in their processes.
