While most lenders may assume their customers understand their communications, the evidence tells a different story. Recent OECD research found that 52% of adults in England have the numeracy skills of a primary school leaver. Ask yourself: could a primary school child understand your credit agreements, fee structures, or payment schedules?

This isn’t just an academic concern – it’s directly impacting your business. Poor customer understanding correlates with increased complaints, higher call volumes, and reduced conversion rates. When customers don’t understand what they’re agreeing to, it creates problems for everyone.

Research commissioned by ClearScore, specifically testing people who self-reported having low credit scores, reveals just how urgent this issue is. Over 2,000 participants were shown different versions of a single loan offer. The results were striking:

• 13% of people understood the original loan offer when tested on basic comprehension questions
• this doubled to 26% when the Plain Numbers Method was applied (while still meeting regulatory requirements for APR and representative examples)
• understanding increased to 35% when Plain Numbers was used without regulatory constraints.

The research clearly highlights issues with the understanding of APR and whether it is the right way for the regulator to ask for the cost of borrowing to be expressed. Perhaps more importantly though, it shows that even when meeting this regulatory expectation there is still plenty of room for improvement in customer understanding.

Crucially, across all versions, the vast majority of participants thought they understood what they were seeing. The comprehension testing revealed the uncomfortable truth – customers often don’t understand what they’re agreeing to, even when they think they do.

The Consumer Duty isn’t just about ticking boxes; it’s about embedding cultural change that puts customers at the heart of everything you do. For specialist lenders, this creates both a challenge and an opportunity.

The FCA’s final guidance explicitly acknowledges that poor numeracy is a customer vulnerability (Guidance 8.34) and references Plain Numbers as a proven method for improving comprehension (Guidance 8.13). This isn’t coincidental, it reflects the regulator’s recognition that clearer number communication is essential for good customer outcomes.

All firms must satisfy themselves they have a reasonable basis to believe their communications are likely to be understood by customers.

Plain Numbers offer an evidence-based approach to transform how you communicate with customers. Our research consistently shows that applying the Plain Numbers Method can double the number of customers who understand a communication. This finding holds true across different types of financial communications.

Independent research backed by the Bank of England
showed similar results across many scenarios:

• water bill comprehension increased from 13% to 48%
• balance transfer understanding rose from 19% to 40%
• insurance payment options understanding went up from 35% to 61%

This isn’t just about compliance – it’s about building trust with customers who may have had negative experiences with financial services in the past.

When customers understand the communications, they receive:

• you’ll likely see complaints decrease as expectations are properly set call volumes can reduce as fewer clarifications are needed
• conversion rates improve as customers feel more confident in their decisions
• as you demonstrate genuine commitment to customer understanding the regulatory risks around this outcome decreases
• the way customers view your firm can improve.

The Consumer Duty represents a fundamental shift in how we think about customer communications. For specialist lenders, who often work with customers facing financial challenges, clear communication isn’t just good practice – it’s essential for building a sustainable business.

Plain Numbers provide a proven, research-backed approach to meeting both regulatory requirements and customer needs. In a market where trust and understanding are paramount, can you afford not to explore how clearer communication could transform your customer relationships?

To learn more about how Plain Numbers can help your organisation improve customer understanding and meet Consumer Duty requirements, contact us for a chat about your business and customer base – enquiries@plainnumbers.org.uk.