Scope and core question: Customer fees and lender commissions
A credit broker may receive a fee directly from the customer, commission from a lender or remuneration through another commercial partner. These payments are not interchangeable. Identify which person pays, when the payment becomes due, whether it is conditional on an agreement and whether the broker's recommendation can be influenced. A statement that a service is free to consumers does not rule out lender-funded commission. UK CONC 4.4 and 4.5 regulate distinct aspects of these arrangements. Record the actual commercial contract rather than relying on a generic disclosure copied from another brokerage. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Applicable regulation and authorisation: UK information notice and customer confirmation
The FCA explains that fee-charging brokers must comply with detailed requirements before charging customers or requesting payment details for that purpose. CONC 4.4 covers an information notice explaining identity, fee, timing and method of payment, and customer confirmation in relevant circumstances. The correct process depends on the transaction and legal rule, so a checkbox must genuinely convey the prescribed information. An ambiguous application button is not reliable evidence of informed confirmation. Preserve the wording, timestamp and consumer acknowledgement, and check whether the fee has been agreed before the credit agreement is entered into. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Consumer-facing transparency: Commission impartiality disclosure
Under CONC 4.5.3R a broker must prominently disclose, in good time, the existence and nature of lender or third-party remuneration where it could affect impartiality or materially influence a customer's transactional decision. CONC 4.5.3AR additionally addresses how such remuneration may affect amounts payable in the circumstances covered. A flat commission, volume incentive and variable commission structure can create different conflicts. The assessment should reflect the actual lender panel, ranking logic and recommendation method. Merely stating that the firm may earn commission can be inadequate where material detail is concealed. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Operational information and evidence: What consumers need to understand
A useful explanation distinguishes the lender's credit cost from any broker fee, identifies the entity taking the payment and describes refund or cancellation arrangements where applicable. Avoid giving the impression that paying a broker guarantees acceptance or a particular interest rate. If a consumer pays for an unsuccessful introduction, review the statutory refund provisions and specific agreement terms. The information should be accessible before an irreversible decision and should remain consistent between marketing, application screens and correspondence. Digital systems must not present the fee only after the consumer enters sensitive payment details. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Remuneration and conflicts: Conflicts, incentives and lender selection
Review whether brokers steer consumers to a product because it produces greater remuneration. The legal and conduct analysis should examine panel restrictions, commission tiers, ranking weights and the consequences for the consumer. In motor finance or other specialist channels, additional rules or decisions may matter and should be verified rather than generalised to every product. A broker cannot resolve a misleading recommendation simply by using a vague disclosure in a footer. Keep a record of how conflicts were identified, mitigated and explained. The customer-facing account of comparison services should accurately reflect the market coverage. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
EU national differences: EU CCD2 and national implementation
Directive (EU) 2023/2225 addresses credit intermediaries within the revised consumer credit regime, generally applicable through Member State measures from 20 November 2026. Its definition and required information are not identical to the FCA's CONC framework. Determine whether the person meets the relevant national intermediary definition, which remuneration and fee disclosures apply and what transition provisions govern the agreement. A multinational site should not transplant UK statutory fee language into every European checkout. Separate creditor charges, broker remuneration and any other service costs in the jurisdiction-specific implementation map. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Testing and quality controls: Controls and evidence checks
Audit a fee-charging intermediary, a commission-funded comparison service and a retailer paid for finance introductions. Review the agreements, disclosure versions, transaction timestamps, refunds, customer confirmations and actual bank deductions. Sample transactions where no loan was arranged and where the recommended lender offered a larger commission than alternatives. Ensure fees are correctly communicated to creditors when relevant to credit-cost calculations. Complaints about unexpected deductions or unclear impartiality should trigger examination of the underlying journey. Keep corrective actions and evidence of retesting, not merely an updated template. Document the specific regulated activity, applicable jurisdiction and rule version. Keep an operational record of who approved the consumer-facing explanation and how exceptions can be challenged. A commercial contract or platform description does not override a statutory definition or relevant disclosure duty.
Frequently asked questions
Does every online comparison service need identical permissions?
No. Classification depends on actual activities, regulated products, applicable law and exemptions.
Does commission always have to be disclosed in the same way?
No. Apply the relevant remuneration rules and materiality conditions for the jurisdiction and product.
Primary sources
FCA credit broking rules ↗FCA CONC 4.5 commissions ↗FCA comparison website rules ↗Directive (EU) 2023/2225 ↗Read the source in its current version. National implementing measures and product-specific applicability may require additional research.