FCA publishes portfolio letter to debt advice firms

FCA has published its Dear CEO letter to the debt advice portfolio, updating its letter of 2020. Most of the messages are similar to those it has given to the mainstream consumer credit lenders, specifically the focus on helping consumers in financial difficulties. It is concerned that:

  • there is insufficient capacity in the sector, so consumers can’t access debt advice when they need it;
  • advice is poor quality and does not adequately support recovery from financial hardship;
  • firms don’t properly identify vulnerable customers and as a result the customers get poor outcomes;
  • firms that fall outside the regulatory perimeter also drive poor outcomes – while these firms are of course outside FCA’s regulatory remit, it urges regulated firms to be wary of unregulated lead generators and remember their own obligations under CONC; and
  • consumers do not always get redress because firms do not have sufficient financial resources.

Emma Radmore