FCA Proposes Ban on Debt Packager Fees
Say Goodbye to Mis-Sold IVAs: FCA Proposes Ban on Debt Packager Fees.
The Financial Conduct Authority (FCA) is taking a strong stand against debt packagers who receive referral fees from debt solution providers. In an effort to improve consumer outcomes and reduce mis-sold IVAs, the FCA has confirmed its intention to ban this current business model. A consultation was conducted in 2021, and based on the responses received, the FCA conducted further research to examine the impact of its proposals.
A further short consultation will allow the FCA to update its analysis of the market, by giving stakeholders the opportunity to comment on the proposed ban of referral fees and provide insight on any new developments in the market. If the proposals are implemented, the measures would end the current debt packager business model and may come in after a short implementation period.
Many people are facing pressures on their finances due to the rising the cost of living, so it’s crucial they get good quality debt advice.
Unsuitable or poor advice can really harm people’s financial lives. We want to stop this harm by removing the conflict of interest between firms giving advice in the customer’s best interest and recommending an option that makes firms more money.
"Many people are facing pressures on their finances due to the rising the cost of living, so it’s crucial they get good quality debt advice. Unsuitable or poor advice can really harm people’s financial lives. We want to stop this harm by removing the conflict of interest between firms giving advice in the customer’s best interest and recommending an option that makes firms more money."
