Question to the HM Treasury:

To ask Her Majesty’s Government what assessment they have made of the effectiveness of regulation of debt management companies.

The Government has fundamentally reformed regulation of the consumer credit market, including the debt management industry, by transferring regulation from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014.

The Government welcomes the binding rules the FCA has placed on debt management firms, including new prudential and client money requirements to better protect consumers’ money.

Under the new regime the FCA has robust powers to protect borrowers – there is no limit to the fines which the FCA can levy and it can require firms to provide redress to consumers.

The FCA will thoroughly assess every debt management firm’s fitness to trade as part of the authorisation process. The debt management industry has been called forward first for authorisation, from this October.