StepChange backs FCA’s proposed Debt Packager referral fee ban

The Financial Conduct Authority’s renewed proposals to ban debt packaging firms from accepting referral fees are hugely welcome. With so many people currently in financial difficulty, the proposed rules will help to undermine the poor practices that can lead to consumers being preyed upon by unscrupulous firms and too often routed towards an unsuitable solution from a provider paying high referral fees.

Richard Lane, Director of External Affairs and Operating Subsidiaries at StepChange, said: “With the cost of living crisis leaving so many people vulnerable to problem debt, the FCA’s move to stamp out poor debt advice practices is extremely welcome. In particular, with proposals for the ban on fees to go ahead after a short implementation period, we can expect to see swift, much-needed action that will benefit thousands of consumers.

“It’s also encouraging that the FCA is improving its guidance on the regulated debt advice boundary in relation to referrals to an Insolvency Practitioner or their firm. However further clarification is needed to ensure consumers seeking advice about debt solutions would have the protection of the standards set by the FCA.”