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The Credit Services Association (CSA)
FCA warns clients of three debt management firms to review their debts
The following email has been received from the FCA (members should show forbearance to any customers affected, and as there has been some confusion with trading names recently members may wish to check the status of trading names on the DMC's website, where applicable):
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.
Members should show forbearance to any customers affected, and as there has been some confusion with trading names recently members may wish to check the status of trading names on the DMC's website, where applicable.
For further information, a full list of contact details can be viewed here.
If you have any further queries, please email our dedicated FCA email address -firstname.lastname@example.org