Warning sign #1: The motor finance and consumer credit enforcement net is tightening
On 11 June 2026, the FCA published further guidance for firms on the motor finance compensation scheme, clarifying the treatment of complaints previously referred to the Financial Ombudsman Service. On 26 June 2026, the FCA updated the Consumer Credit sourcebook to incorporate explicit Consumer Duty references and additional guidance on overdraft repeat use, requiring enhanced customer communications and support measures. On the same date, the FCA launched Consultation Paper CP26/23, proposing amendments to the scope and proportionality of the Consumer Duty, including clarifications on how the Duty applies across distribution chains and to firms with limited influence over retail customer outcomes. The consultation closes on 18 September 2026. On 15 June 2026, the FCA also launched Consultation Paper CP26/19 proposing targeted updates to its penalty and decision-making framework, including increased minimum penalties for serious market abuse cases and enhanced flexibility in settlement decision-making.
The pattern here is unmistakable: the FCA is simultaneously refining the scope of the Consumer Duty, strengthening enforcement tools, and increasing minimum penalties – all while the motor finance compensation scheme remains live. Any financial services firm with consumer credit, motor finance, or retail distribution exposure is operating in an environment of heightened regulatory and litigation risk. The Consumer Duty scope consultation is particularly significant – clarification of what the Duty covers also clarifies what failure to comply looks like, and that clarity tends to generate claims.
What to watch: Group consumer claims under the motor finance compensation scheme, FCA enforcement actions for Consumer Duty failures across distribution chains, and individual claims from customers who did not receive adequate communications about overdraft positions or debt options.
Warning sign #2: National minimum wage enforcement is active, aggressive, and expanding
On 12 June 2026, HMRC updated two separate guidance documents on National Minimum Wage compliance. The first – guidance note NMW FS3 – clarified that HMRC may issue an underpayment notice even where arrears have already been paid, that arrears are calculated using current wage rates rather than historic ones, and that employers face penalties of 200% of underpayment, subject to a minimum of £100 and a maximum of £20,000 per worker. The second update clarified HMRC's enforcement powers more broadly, including the use of open-source information in compliance assessments, employer naming measures, prosecutions, and labour market enforcement orders.
The publication of two NMW enforcement guidance documents in a single day – one addressing penalties and the other addressing enforcement powers – is not coincidental. It signals that HMRC is actively communicating the breadth and severity of its enforcement toolkit. The use of open-source information in compliance assessments is a particularly significant development: it means HMRC can identify potential underpayment risks without relying on a complaint or a whistleblower. Businesses in sectors with high volumes of variable-hours, piece-rate, or tip-based pay arrangements face the greatest exposure.
What to watch: HMRC underpayment notices issued even after historic arrears are settled, Employment Tribunal claims by workers combining NMW arrears with other employment rights claims, and reputational exposure from the employer naming scheme for confirmed underpayers.
Warning sign #3: Ofcom is moving from guidance to enforcement on online safety – major platforms have already been put on notice
On 15 June 2026, Ofcom announced plans to strengthen online safety protections for children under 16, specifically raising concerns that major platforms – including Facebook, Instagram, Roblox, Snapchat, TikTok, and YouTube – are not effectively enforcing minimum-age requirements, leaving children exposed to harmful content. Ofcom formally requested that these platforms explain the measures they will take to improve child safety, including implementing effective age-assurance systems, strengthening anti-grooming safeguards, improving recommendation algorithms, and conducting safety assessments before introducing new AI-driven features. Ofcom warned that failure to provide satisfactory responses may result in enforcement action under the Online Safety Act.
On 25 June 2026, Ofcom updated its Illegal Harms framework to include encouraging or assisting serious self-harm and cyberflashing as priority offences, requiring providers of regulated online services to update their illegal content risk assessments and implement appropriate mitigation measures. On 1 June 2026, DSIT laid before Parliament draft amendments to the Illegal Content Codes of Practice introducing hash-matching requirements for intimate image abuse content. On 18 June 2026, further draft amendments introduced mandatory crisis response protocols for large user-to-user services assessed as at medium or high risk of specified illegal harms.
Ofcom has moved from building the framework to enforcing it. The formal request to named platforms – coupled with an explicit enforcement warning – is a public signal that the regulator is prepared to act. For any business operating a user-to-user service, a search service, or a platform with child users, the risk is no longer theoretical. Failure to complete updated risk assessments, implement required mitigation measures, and meet crisis response protocol requirements creates direct regulatory exposure – and the reputational consequences of being named in an Ofcom enforcement action in the child safety context are severe.
What to watch: Ofcom enforcement actions against platforms that fail to respond adequately to the child safety request, regulatory investigations arising from delayed or inadequate illegal content risk assessment updates, and civil claims from individuals harmed by content on platforms that failed to implement required safeguards.
