Ban on Receiving Referral Fees from Debt Solutions Comes into Effect

Ban on Receiving Referral Fees from Debt Solutions Comes into Effect

The Financial Conduct Authority (FCA) has launched a new ban on debt packagers which came into effect today, October 2nd, 2023. This ban prevents debt packager firms from accepting commission, fees, or any other financial considerations (referral fees) from debt solution providers for their referral and related services. The ban applies to all forms of debt solutions (except payments made in certain circumstances excluded by CONC 8.3.14R) and applies to firms who are appointed representatives (ARs). Lead generators and insolvency practitioners have been advised to follow the guidelines of PERG 17.7 published by the FCA in June as part of the final rules and to apply for authorization where required. Any firm which was previously operating or restarting its debt packager business, or newly appointed ARs, were subject to the ban since June 2nd, 2023.