The Financial Conduct Authority (FCA) is warning customers of three debt management firms to check their debt situation with their creditors and find out exactly what they owe. The debt management firms are Sterling Financial Security Limited (Sterling), Haydon Associates Debt Management Consultants Limited (Haydon) and Clear View Finance Limited (Clear View). All three firms are based in Lichfield.
Most customers with debt reduction plans with these firms have been paying 90% of their monthly payments in fees leaving 10p in the pound to pay down the debts for an unlimited period of time. These firms have failed to comply with the requirements we put in place to provide written statements to customers setting out their debt position.
These firms are no longer permitted by the FCA to offer debt management services to customers. As a result, they will no longer be able to negotiate with creditors on their customers’ behalf or set up new debt management or reduction agreements.
The FCA is warning that customers of the three firms may be left with a debt larger than they expect, even if they have been paying into a plan for some time. That is why, as a matter of urgency, customers should check their debts and seek advice on what to do next.
Debt advice helps millions of people get back on an even keel and people should not be put off seeking advice because of today’s warning. The Money Advice Service is working with free and not-for-profit debt advisors to help people manage their creditors and reduce their debts.
The FCA is reviewing the authorisation of all firms providing debt adjusting or debt counselling. To continue trading firms are being required to submit new applications.
Anyone with a debt management or debt reduction plan with any of the three firms is still responsible for repaying their debts. They can contact the Money Advice Service on 0300 330 2222 or at www.moneyadviceservice.org.uk/debt-management[1].
Notes to editors
Customers can contact the Money Advice Service[2], which will help them find debt advice from a free and not-for-profit provider. They can call the Money Advice Service debt advice line on 0300 330 222 or check their website: www.moneyadviceservice.org.uk/debt-management[3].
Customers of the three firms may find themselves being approached by another debt management firm or other third party. They should be aware that if they don’t want to transfer their debt management plan to another firm, they should request information on how you leave the debt repayment plan.
- The supervisory notices for Sterling Financial Security Limited[4], Haydon Associates Debt Management Consultants Limited[5] and Clear View Finance Limited[6].
- In September 2014, the FCA issued[7] a press notice warning debt management firms that they needed to raise their game.
- Regulation of consumer credit transferred from the Office of Fair Trading to the FCA on 1 April 2014.
- Firms that formerly had an OFT licence will need to apply to FCA for authorisation no later than March 2016. The FCA is staggering the application deadlines for various categories of firms: firms offering debt management services are amongst the first to be required to apply.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- You can find more information about the FCA[8], as well as how it is different to the PRA[9].