What the FCA is
The Financial Conduct Authority is the UK's independent regulator of financial services. It is a public body, funded by the firms it regulates, with a statutory mandate established under the Financial Services and Markets Act 2000. The FCA's role is to set the standards every authorised firm must meet, supervise their conduct and take enforcement action where firms fall short.
The FCA in its current form was created on 1 April 2013, taking over from the Financial Services Authority (FSA), which was abolished following criticism of its performance during the 2008 financial crisis. From 1 April 2014, the FCA also assumed responsibility for consumer credit (loans, credit cards and short-term lending) from the Office of Fair Trading. The regulator currently oversees approximately 42,000 firms across all sectors of UK financial services.
If a firm wishes to lend, advise, broker, insure or invest in the UK, FCA authorisation is a legal requirement. No authorisation, no business.
The basic principle
Authorisation is granular. A firm may be permitted to broker loans without being permitted to lend directly. It may be permitted to give investment advice without being permitted to manage investments on a discretionary basis. The FCA Register, which lists every authorised firm and the specific activities each is permitted to carry out, is publicly searchable and is updated on average every 24 hours. Firms operating without the appropriate authorisation are committing a criminal offence under section 19 of the Financial Services and Markets Act 2000.
The three statutory objectives
Parliament gave the FCA three statutory objectives in the Financial Services and Markets Act 2000. These are the only outcomes the FCA is legally required to pursue. Every rule the FCA writes and every supervisory action it takes must be justified by reference to one or more of these objectives.
Source: Financial Services and Markets Act 2000 (as amended). Two of the three objectives are explicitly about consumer outcomes; the third concerns market stability and benefits consumers indirectly.
A secondary objective was added in 2023 requiring the FCA to facilitate the international competitiveness and growth of the UK economy in the medium to long term. Where the secondary objective conflicts with the primary objectives, the primary objectives take precedence. The first objective, consumer protection, is the most directly relevant when something goes wrong with a financial product or service. A regulator with a statutory duty to consumers is meaningfully different from one without.
The regulatory perimeter
The regulatory perimeter is the FCA's term for the boundary between activities it regulates and those it does not. Most things commonly recognised as financial products fall inside the perimeter. Some notable exceptions remain. Where a problem involves an activity outside the perimeter, the FCA cannot intervene and a different complaint route applies.
| Activity | Within the perimeter | What this means in practice |
|---|---|---|
| Personal loans and credit cards | Yes | Full FCA conduct rules apply, with FOS escalation available |
| Mortgages and remortgaging | Yes | FCA rules apply under a separate regime from consumer credit |
| Insurance (most types) | Yes | Conduct rules apply, FOS available for disputes |
| Investment advice and platforms | Yes | Suitability and conduct rules apply |
| Pensions (most types) | Yes | FCA rules apply |
| Buy-now-pay-later (currently) | Mostly no | Coming inside the perimeter from mid-2026 |
| Premium Bonds (NS&I) | No | Government-backed, with a separate complaints procedure |
| Cryptocurrency (most uses) | Mostly no | Limited FCA oversight, with high consumer risk |
| Most B2B financial services | Often no | Different rules apply to non-consumer transactions |
Why is buy-now-pay-later not yet regulated?
A historical exemption in the rules excluded interest-free credit repayable in 12 months or fewer. Buy-now-pay-later (BNPL) products fitted that exemption almost perfectly when they grew rapidly from 2018 onwards. Providers such as Klarna and Clearpay therefore developed outside FCA oversight. The government has since legislated to bring BNPL inside the perimeter, with rules taking effect from mid-2026. Until that point, BNPL agreements do not carry the same protections as a credit card and do not trigger Section 75 chargeback rights under the Consumer Credit Act 1974.
The Consumer Duty: the headline protection since 2023
The Consumer Duty is the most significant change to UK financial regulation in a decade. It applies to every authorised firm and sets a higher standard of consumer protection than any previous regime. The Duty came into force on 31 July 2023 for products and services available to buy or renew. It applied to closed and legacy products from 31 July 2024.
The Duty sits at Principle 12 of the FCA's Principles for Businesses. The wording is short:
A firm must act to deliver good outcomes for retail customers.
FCA Principle 12 · In force 31 July 2023
Underneath the headline principle sit three "cross-cutting rules" requiring firms to act in good faith, avoid foreseeable harm and enable customers to pursue their financial objectives. Below those sit four "outcome rules" covering products and services, price and value, consumer understanding and consumer support. The combined effect raises the legal bar significantly. Complaints brought to the Financial Ombudsman Service or to the courts can now succeed on the basis of poor outcomes alone, even where no specific FCA rule was technically breached. The Consumer Duty is covered in detail in our guide on the Consumer Duty.
Before the Duty, firms had to treat customers fairly. Under the Duty, firms must actively deliver good outcomes. The legal standard moved up.
What changed in July 2023
The FCA Register: the two-minute check
Every authorised firm in the UK is listed on the FCA's public Register. The Register is free to search, takes around two minutes to use and provides definitive confirmation of a firm's status. It is the single most important consumer-protection tool the FCA provides. It is also the foundation of almost every other protection in this guide.
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Whether the firm is currently authorised
"Authorised" status indicates a current licence to trade. "Revoked" or "Cancelled" status indicates the licence has been withdrawn. A firm not appearing on the Register at all is unauthorised. Trading without authorisation is a criminal offence.
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The specific activities the firm is permitted to carry out
Authorisation is granular. A firm authorised to broker loans is not necessarily authorised to lend. The reverse is also true. The Register details exactly which activities each firm is permitted to undertake.
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The firm's verified contact details
Where a firm contacts a consumer using details that do not match the Register, the consumer may be dealing with a "clone firm" (a fraudster impersonating an authorised firm). Cross-checking using only the Register-listed details is the most effective protection against clone fraud.
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Public disciplinary history
Where the FCA has taken formal action against a firm, the action is recorded on the Register and remains visible. A check before commitment can identify firms with a pattern of regulatory failures.
Two consumer-facing tools draw on the same underlying database. The full Financial Services Register is the comprehensive version. The simpler FCA Firm Checker is designed for consumers and walks the user through the necessary steps. Both are free to use and updated daily. Our guide on verifying FCA authorisation explains the check in detail and walks through how to interpret the results.
How the FCA enforces its rulebook
The FCA's enforcement powers are real and have been used consistently. The 2024/25 figures provide a clear picture of how the regulator turns its rulebook into practical consumer protection.
| Action | Number or value | What it means |
|---|---|---|
| Fines issued | £124m total | Spread across 37 final notices against firms and individuals |
| Authorisations cancelled | 1,456 firms | Firms permanently removed from the Register |
| Criminal convictions | 5 individuals | Custodial sentences in some cases |
| Voluntary redress secured | £354.6m | Money the FCA pressed firms to pay customers |
| Largest individual fine | £39.3m (Barclays) | For misleading the regulator and customer treatment failings |
| Largest neobank fine | £21.1m (Monzo) | For financial crime control failures |
Enforcement action takes several forms beyond fines. The FCA can impose business restrictions (preventing a firm from taking on new customers or entering new product lines), require the appointment of a skilled person to investigate at the firm's expense or revoke authorisation entirely. Where conduct is criminal, the FCA can prosecute or refer cases to the police and the Serious Fraud Office.
What is the FCA doing about motor finance commissions?
The FCA finalised its industry-wide motor finance redress scheme in policy statement PS26/3 on 30 March 2026. The scheme covers motor finance agreements entered into between 6 April 2007 and 1 November 2024 where commission was paid to a broker without proper disclosure. The FCA estimates total redress of £7.5 billion across approximately 12.1 million eligible agreements, with average compensation of around £830 per agreement. Implementation runs from mid-2026, with the vast majority of cases settled by the end of 2027. Consumers who took out motor finance during the scheme period may be eligible.
How to use these protections in practice
Knowing the FCA exists is one matter. Using its protections when something goes wrong is another. The following sequence sets out the standard approach when a regulated firm has caused harm.
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Confirm the firm is FCA-authorised
The first step is always to check the FCA Register. If the firm is authorised, the protections set out below apply. If the firm is not authorised, different routes apply, as covered in our guide on scams and loan sharks.
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Complain to the firm in writing
FCA rules require every authorised firm to operate a complaints procedure and to issue a final response within 8 weeks. The complaint should be made clearly and in writing, with copies retained. The 8-week clock begins on the date the firm receives the complaint.
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Escalate to the Financial Ombudsman Service
If the firm's final response is unsatisfactory or if no response is issued within 8 weeks, the consumer is entitled to refer the matter to the Financial Ombudsman Service. The Ombudsman is free, independent and binding on the firm. The deadline for referral is 6 months from the firm's final response.
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Quantify and claim compensation where loss has been suffered
Where the firm's conduct has caused financial loss, our guide on claiming compensation for unfair lending sets out how to calculate what is owed and how to support the claim with evidence. The FOS can award up to £455,000 from 1 April 2026 for acts on or after 1 April 2019.
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Use the FSCS where the firm has failed
The Financial Services Compensation Scheme (FSCS) is the safety net for cases where an authorised firm has gone out of business. The current limit is £85,000 per person per firm for most claims (£120,000 for deposits since 1 December 2025). The FSCS is free to use and does not require a claims management company.
Common misconceptions about the FCA
The FCA is widely misunderstood, sometimes by people who have dealt with it for years. The four misconceptions below are particularly common and worth correcting before relying on the regulator's protections.
"The FCA stops bad firms before they harm anyone."
False. Authorisation is a high bar at entry, but firms can still cause harm before being detected. The Register confirms authorisation status, but it does not guarantee the firm will treat every customer well.
"You can take an individual complaint to the FCA and they will resolve it."
False. The FCA does not adjudicate individual disputes. Complaints between consumers and firms go to the Financial Ombudsman Service. The FCA acts on patterns of harm rather than single cases.
"FCA-authorised means the product is safe to invest in."
False. FCA authorisation regulates a firm's conduct. It does not eliminate investment risk. A consumer can lose money in an authorised investment if the underlying market falls. Authorisation guarantees the firm follows the rules, not that any investment will succeed.
"The FCA is too soft on the major banks."
False. Major firms received the largest fines in 2024/25: Barclays £39.3m, Monzo £21.1m, Volkswagen Financial Services £5.4m plus £21.5m in customer redress. Larger firms attract larger sanctions in proportion to consumer impact.
What the FCA cannot do
Realistic expectations of the FCA improve the chances of using the system effectively. Three boundaries are worth understanding clearly.
The FCA does not adjudicate individual disputes. A complaint about a specific firm's specific conduct goes to the Financial Ombudsman Service, not to the FCA. The FCA collects complaint data and uses it to identify patterns, but it will not investigate or rule on a particular consumer's complaint.
The FCA does not pay compensation directly. Fines collected by the FCA pass to HM Treasury, not to consumers. Consumer compensation comes from the firm itself (voluntarily or under FOS direction), from a court order or from the FSCS where the firm has failed. The regulator drives the compensation but does not make the payment.
The FCA does not regulate investment performance. An FCA-authorised platform that follows all the rules can still hold an investment whose value falls. The regulator ensures the firm operates fairly and discloses risks; it does not prevent market losses. Investment risk is borne by the investor.
For matters that fall outside the FCA's remit, alternative routes exist. Pension scheme disputes go to the Pensions Ombudsman. Property agent complaints go to the Property Ombudsman or Property Redress Scheme. Tax matters go to HMRC and ultimately the tax tribunals. Court action remains available in any case where the consumer prefers a binding legal judgment.