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News for Members

25 June 2015

Quality of Debt Management Advice - Thematic Review Summary

The FCA recently conducted a 'thematic review' into debt management in order to identify any current or emering risks.  

The review looked into debt advice in a sample of fee-charging and free-to-customer debt management firms covering a cross-section of the market.  

Debt Management firms typically offer debt advice and a range of debt solutions, ranging from informal agreements with creditors to pay off debts over a period of time to statutory solutions like the Scottish Debt Arrangement Scheme or filing for bankruptcy.

All the firms should have been fully compliant with the rules in the FCA Handbook (which have been in effect since 1 April 2014).  However the review found that the advice from fee-charging debt management firms in the sample was of an unacceptably low standard.  Approximately 60% of the fee charging cases which the FCA reviewed were assessed as posing a high risk of harm to customers, compared to 20% from the free-to-customer firms.

To find out more about what the FCA found and what they're doing as a result, click on the link below:

Read the thematic review summary here...

For a more detailed version covering the full Thematic Review, visit the FCA website.

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