FCA Warns CFD Providers Over Hidden Charges and Failing Consumer Duty Standards

The Financial Conduct Authority (FCA) has issued a pointed warning to Contracts for Difference (CFD) providers after uncovering significant shortcomings in pricing transparency, fee structures, and consumer protection standards across the sector.

The findings follow a targeted review assessing how CFD firms have responded to the Consumer Duty, introduced in July 2023 to impose higher expectations on fair value and customer outcomes.

Mark Francis, Director of Sell-Side Markets at the FCA, said that the Duty represents a step-change in expectations: “The Consumer Duty fundamentally raises the bar for how firms must treat consumers. CFD providers need to meet those standards — not simply talk about them.”

Review Finds Hidden Costs and Unfair Fee Practices

The FCA said that although some providers demonstrated improvements in areas such as streamlined fee structures and better risk controls for inexperienced traders, multiple weaknesses remain widespread.

Among the concerns highlighted:

  • Unclear and inconsistent overnight financing charges, sometimes applied at different levels without justification.
  • Insufficient disclosure around the true cost of carrying leveraged positions overnight.
  • Charging both sides of matched long and short positions, generating ongoing fees with minimal economic value for customers.
  • Failure to incorporate complaint trends or satisfaction data into assessments of fair value.
  • Little or no evidence of product redesign following the introduction of Consumer Duty requirements.

The regulator noted that practices around funding fees were particularly problematic, leaving traders unable to make informed cost comparisons or understand how charges accumulate.

Regulatory Pressure Intensifying

The FCA said it will follow up directly with firms reviewed and warned that supervisory and enforcement actions remain on the table for those failing to meet expectations.

Francis emphasized that CFDs remain high-risk leveraged instruments, making pricing transparency and consumer fairness non-negotiable priorities: “Firms must demonstrate fair value, clear communication, and measurable customer benefit — not simply compliance on paper.”

Whistleblowing Data Signals Ongoing Weaknesses

The regulator also revealed that in Q2 2025 it received 315 new whistleblowing reports, containing more than 1,130 allegations, with Consumer Duty-related issues accounting for 98 of them.
Eight cases resulted in major enforcement actions, and 147 led to harm-reduction interventions, highlighting persistent weaknesses across retail trading firms.

What This Means for Traders

  • Check fee structures beyond spreads, especially overnight financing and swap policies.
  • Compare matched position costs — holding offsetting trades should not generate excessive fees.
  • Demand transparency: if costs are unclear, the broker may not comply with Consumer Duty standards.
  • Use customer-complaint data and independent reviews before choosing a provider.

Meanwhile, CySEC has issued a separate warning after identifying 10 unlicensed investment platforms targeting retail traders without authorization. The regulator urged investors to verify licensing status before depositing funds, noting increased activity from offshore entities operating illegally across Europe.