Checked against sources on 13 October 2026
Picture a customer with two buy-now-pay-later agreements running. One morning a short message arrives: “Your payment failed.” Which purchase is it? How much is now owed? Is there a fee, and will it reach their credit file?
If the agreement is a regulated deferred payment credit agreement, the answer sits in rule CONC 7.20.1R. As soon as possible after a missed payment, the firm must tell the borrower that the payment was missed and which sums are now due and unpaid, including unpaid charges. It must also give the borrower enough information to understand three things: which agreement is affected, what adverse consequences have arisen or are likely, and, where relevant, how to reduce them. All of it must be provided together.
Which agreements does CONC 7.20 cover?
CONC 7.20 applies to regulated deferred payment credit (DPC) agreements. The FCA describes DPC as interest-free credit repayable in 12 or fewer instalments within 12 months or less (PS26/1). Since 15 July 2026, a DPC agreement is regulated in two cases. The lender and the supplier are not the same person, or an arrangement with a merchant makes the lender the legal supplier (FCA).
Some third-party DPC agreements stay outside, such as those financing insurance premiums or employee borrowing. Agreements entered into before 15 July 2026 remain exempt. The legal definition is in the Handbook glossary, by reference to article 60F of the Regulated Activities Order.
Two details matter before anyone reviews the wording. First, the FCA uses “BNPL” for a different group: other regulated credit agreements with buy-now-pay-later offers, which it treats as distinct from DPC. Confirm which rules apply to the agreement before you check the notice. Second, in this rule a “payment” means a repayment of capital. Missing the payment of a charge for non-compliance does not, by itself, trigger the rule (CONC 7.20.1R(4)).
One familiar notice drops out. The statutory notice of sums in arrears under section 86B of the Consumer Credit Act does not apply to regulated DPC agreements (section 86B(11A)). For those agreements, the CONC 7.20.1R notice is the one to check. Our CONC 7 arrears article covers section 86B for other fixed-sum credit.
What must a missed-payment notice include?
Rule CONC 7.20.1R has two parts, and they set different standards.
The first is a notification. The firm must tell the borrower that the missed payment has occurred. It must also tell them about any sums that have become payable under the agreement but remain unpaid, including unpaid charges for non-compliance. That is wider than the instalment just missed: it covers everything due and unpaid under that agreement.
The second is an understanding test. The firm must give the borrower enough information to understand:
- which agreement the missed payment relates to;
- the adverse consequences that have already arisen from it;
- the adverse consequences the firm considers likely to arise;
- where relevant, the steps the borrower can take to mitigate those consequences.
Two conditions govern how and when. The information must be provided together, and as soon as possible after the missed payment. The rule sets no fixed number of days.
What does the FCA guidance add about charges and credit files?
Guidance CONC 7.20.2G names two areas for the consequences and mitigation parts of the rule. The firm should consider in particular the circumstances in which it applies charges for missed payments. It should also consider the circumstances in which it reports missed payments to a credit reference agency.
This is guidance, not a rule. It tells the firm where to look, not what to write.
Our reading of the operational effect, which is not FCA text: the consequence wording depends on the firm’s own charging and reporting policies. Where those policies treat situations differently, the team has to decide how each notice reflects the situation that customer is actually in.
How can the team check a notice against the rule?
Read the notice as the customer would, with nothing else open. Each question below maps to one part of the rule or guidance.
| Check question | Source |
|---|---|
| Can the customer tell from this notice alone that a payment was missed? | Rule 7.20.1R(2)(a)(i) |
| Does it show all sums now due and unpaid under this agreement, including charges, not only the missed instalment? | Rule 7.20.1R(2)(a)(ii) |
| If the customer has more than one agreement, can they tell which one this is? | Rule 7.20.1R(2)(b)(i) |
| Does it say which consequences have already happened? | Rule 7.20.1R(2)(b)(ii) |
| Does it say which consequences the firm considers likely, and does that match its charging and credit-reporting policy for this situation? | Rule 7.20.1R(2)(b)(iii); Guidance 7.20.2G |
| Where relevant, does it say what the customer can do to reduce those consequences? | Rule 7.20.1R(2)(b)(iv) |
| Is all of this in one place, or does the customer need a second message to follow it? | Rule 7.20.1R(3) |
| How soon after the missed payment is the notice issued? | Rule 7.20.1R(2) |
These are review questions, not sample wording. The right answers depend on the agreement, the firm’s policies and the customer’s position.
Some checks belong to the template: its wording, and which consequence sentences apply in which situation. Others belong to each notice: the right customer, agreement, amounts and