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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 read

· Last updated: April 1, 2026

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UK's FCA urges second-mortgage providers to address consumer protection gaps

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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

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

What 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.

What 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.

How are second mortgage providers steering consumers?

Some providers steered consumers towards debt consolidation without proper clarification and transparency.

What 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.

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UK's FCA urges second-mortgage providers to address consumer protection gaps

FCA Calls on UK's Second Mortgage Providers to Improve Consumer Protections