The FCA announced that a review of the debt management sector is a priority for 2017/2018 to stop poor practice by debt management companies and reduce the high risk to consumers.
In their past reviews the FCA set out that debt management firms needed to raise their game if they wanted to continue to operate. It found significant concerns with the quality of advice being given by commercial ‘debt collector’ providers in particular. The FCA has intervened and refused authorisation to a number of providers whilst those that remain have had to show that they meet threshold conditions in order to be authorised.
The FCA will base this review on both fee-charging and free-to-customer debt management providers, and will look at the outcomes for customers from the service they are given as well as the initial advice process. The aim is to understand where there is good practice that is helping consumers to achieve positive results in dealing with their debts.
This review serves as another warning for companies who use debt collection agencies, instead of solicitors.
If you would like more information on debt management both inside and outside of your business then come along to our seminars in February and March. Click here for further details.