The Duty’s emphasis on consumer understanding has rightly elevated the role of clarity, transparency and engagement. Firms increasingly recognise that communications are not simply compliance artefacts, but central tools for shaping customer experience and outcomes.

In consumer credit in particular, communications often carry significant weight. They explain costs, risks, rights and options at moments when customers may already be under financial pressure. Getting those messages right is therefore fundamental to fair treatment.

However, recognising communication as central does not make it straightforward. In many respects, it is one of the most demanding areas of the regime.

One of the most persistent challenges is the tendency to conflate outputs with outcomes.

A document may be written in plain English. It may be shorter, better structured and tested against readability benchmarks. It may even incorporate behavioural insights intended to improve engagement.

However, none of this automatically guarantees that customers understand what they are reading, engage meaningfully with it, or act as firms intend.

Real-world customer behaviour rarely mirrors testing environments. Consumers skim communications, revisit them at different stages, or focus only on certain elements. Their understanding is shaped not only by the document itself, but by context, stress, prior experience and digital presentation.

Measuring “understanding” in a way that is robust, proportionate and scalable is therefore inherently difficult.

Firms are asked to demonstrate that customers understand key features and risks.

Yet the tools available to do so often offer only partial reassurance. Surveys, A/B testing, complaints data and behavioural metrics all offer insight – but none delivers a complete picture.

The result is a degree of evidential uncertainty that firms must navigate carefully.

There is also a broader tension linked to regulatory interpretation.

Improving or simplifying communications can feel exposed in a highly regulated environment. Firms may reasonably ask whether removing a paragraph, restructuring disclosures or shortening warnings could later be interpreted as insufficient.

Questions of interpretation do not sit solely with the FCA. The motor finance commission issue has reminded the sector that legal scrutiny can extend beyond regulatory expectations. Courts may interpret historical disclosures and practices differently from how firms understood them at the time.

Alongside this, there is understandable uncertainty about how the Financial Ombudsman Service may assess communication decisions in individual cases. The retrospective nature of complaint handling can add to concerns about how simplification efforts will be viewed years later.

Taken together, this environment can make innovation feel risky. In the absence of absolute certainty, firms may default to familiar – even if imperfect – approaches. That is an understandable response to legal and regulatory complexity, but it may also slow progress towards clearer, more accessible communication.

For smaller and specialist lenders, these challenges are often amplified by capacity constraints.

Large firms may be able to run extensive behavioural testing programmes, maintain standing customer panels or commission external reviews. For many smaller firms, particularly those operating in niche or specialist markets, such programmes are not always realistic on a recurring basis.

Yet expectations around communication quality and evidence continue to rise. Firms are not only expected to improve communications, but to demonstrate clearly how they have assessed effectiveness and consumer understanding.

This raises an important proportionality question. Consumer Duty applies across diverse markets and business models. Ensuring that expectations reflect operational realities – without diluting the focus on outcomes – is critical to maintaining confidence in the regime.

Proportionality does not mean lower standards. It means recognising different starting points, resource profiles and customer bases, and assessing evidence accordingly.

None of these challenges undermine the central importance of better communication. There is clear and widespread agreement that improving consumer understanding is fundamental to good outcomes.

However, if Consumer Duty is to deliver sustainable, real-world improvements, it is important to acknowledge the trade-offs involved. Clearer communication is not simply a drafting exercise. It requires judgment, iteration, testing, governance oversight and a willingness to adapt.

It also requires a regulatory understanding of how firms operate in practice. Open dialogue about what constitutes reasonable evidence, how proportionality should be applied and how firms can innovate responsibly is essential.

The discussion at Inform reflected that shared ambition. It highlighted both the progress being made and the complexities that remain. Continuing that pragmatic debate will be key to ensuring that the communication expectations under Consumer Duty remain focused on outcomes while grounded in operational reality.