FCA to “push ahead” with proposed debt packager referral fees ban

The regulator initially consulted on a ban in November 2021, doing so after identifying a lack of adequate management of the conflict of interest between giving advice in the customer’s best interests and recommending an option that makes the firms more money.  

Following analysis of the feedback it received to that consultation, it decided to gather some additional evidence from the debt packager market to supplement its existing evidence base.  

A further short consultation, which will allow the FCA to update its analysis of the market, by giving stakeholders the opportunity to comment on the proposed ban and provide insight on any new developments in the market. If the proposals are implemented, the measures would end the current debt packager business model.  

The regulator’s executive director of consumers and competition Sheldon Mills said: “Many people are facing pressures on their finances due to the rising the cost of living, so it’s crucial they get good quality debt advice.   

“Unsuitable or poor advice can really harm people’s financial lives. We want to stop this harm by removing the conflict of interest between firms giving advice in the customer’s best interest and recommending an option that makes firms more money.”