FCA bans debt packager referral fees

FCA has made its final rules banning debt packager firms from operating a business model that incentivises them to recommend options that make them more money rather than those that are in their customer’s best interests. FCA research found the median referral fee for referrals for IVAs in 2019-20 was £940, whereas Debt Relief Orders cost £90 upfront in fees.  The new rules will take effect from 2 October for existing firms, and with immediate effect for new entrants.

Emma Radmore