FCA issues warning over debt management firms

The debt management firms are Sterling Financial Security Limited, Haydon Associates Debt Management Consultants Limited and Clear View Finance Limited. 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.

The FCA stressed that "people should not be put off seeking advice because of today’s warning", and is reviewing the authorisation of all firms providing debt adjusting or debt counselling. To continue trading firms are being required to submit new applications.