FCA launches review into 'high risk' debt management sector

The review will scrutinise how providers are meeting the needs of consumers since the FCA's last review in 2015, where it made several interventions in the market.

In 2014, the regulator warned that firms in the sector "needed to raise their game if they wanted to continue to operate".

The 2015 thematic review found "significant concerns" with the quality of advice being given by commercial providers in particular.  

Since then, it has refused authorisation to a number of providers while others have left the market. Those that remain have had to show that they meet the FCA's threshold conditions in order to be authorised.

The new review will be based on a sample of both fee-charging and free-to-customer debt management providers, looking at the outcomes for customers from the service they are given as well as the initial advice process.

The FCA will also review customer case files and visit providers to interview staff and observe their processes and dealings with customers.

In a statement, the FCA says it "will take appropriate supervisory action" if it finds that firms are falling short of standards.

The review is expected to be completed in Q1 2019.