In line with its 2017/18 Business Plan, FCA has begun its thematic review of the debt management sector. FCA has taken a particular interest in this sector, owing to the increased risks faced by (particularly vulnerable) consumers where firms fail to meet their needs. In 2014, FCA declared that debt management firms needed to “raise their game” if they wanted to continue to operate, and identified significant concerns with quality of debt management advice in its 2015 thematic review.
The current review will analyse not only the initial advisory process but also the results of that process, and will be based on a sample of fee-charging and free-to-customer debt management providers. FCA hopes to build a full picture of the sector, identifying good practice as well as bad. Customer case files and process will be reviewed, and FCA will take appropriate action if firms are falling short of its standards.
FCA expects to conclude the review in Q1 2019.