FIN.

Debt packager referral fee ban implementation period ends

In June 2023, FCA published its policy statement and final rules on debt packager referral fee bans, which took effect from 2 June 2023 for new debt packager firms and their newly appointed ARs, but which existing debt packagers and their existing ARs at the time an implementation period of 4 months, up to 2 October 2023.

All debt packager firms must now comply with the ban. This means that firms benefitting from the implementation period must not get any financial benefit from a debt solution provider for any referral after 2 October 2023. The ban does not apply to work carried out before 3 October 2023 where a firm has accrued contractual right to payment for the referral in relation to a customer. Principal firms must also ensure their ARs do not breach these requirements.

The ban applies to all debt solutions except payments made in certain circumstances which are excluded by CONC 8.3.14R.

FCA advises generators and insolvency practitioners to consider PERG 17.7 along with its final rules, and apply for authorisation if needed.

 

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