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INTO THE FOLD .

The FCA on supporting clients through authorisation .
VAL SMITH
Director for Consumer Credit Authorisations
FCA
It is one of the biggest changes the consumer credit sector has ever seen .
Since the regulation of consumer credit moved from the OFT to the FCA in April 2014 clients , creditors and debt advisors have been finding their place in this evolving landscape .
One of the biggest challenges is supporting customers of firms that are not authorised because they do not meet the required standards .
Here , the FCA ’ s Director for Consumer Credit Authorisations , Val Smith , talks through measures they have been taking to make certain creditors and advisors work together to ensure impacted consumers are not further disadvantaged .
She says , “ Consumers have always been at the heart of our authorisation programme and we are committed to ensuring that they are treated fairly by credit firms , both commercial and not for profit .
To that end , we will only authorise firms who meet the required standards . There are more than 400,000 people currently using commercial debt management plans with a view to resolving their debt issues .
We are only part way through the authorisation assessment process but from the very beginning we have been clear about the need for firms to put customers first – providing them with the information they need to make informed choices . When firms are refused authorisation it is crucial that no-one is left without the help or support that they need .
One of the most recent firms that was refused authorisation had 16,000 clients , so the numbers of people impacted are significant .
To this end , we have already undertaken an extensive programme of engagement and awareness raising with creditors , trade bodies , firms , MPs and others so they know what to expect and how best to help consumers .
We are writing to the customers of firms that leave the market , for example because they are refused authorisation or they choose to withdraw their application . Where necessary , we are asking these firms to provide us with current contact details for all their customers so we are able to send each customer a letter explaining what has happened , and what they can do next .
We expect firms to assist us with this as much as possible – and to provide the best and most up to date details they have . It is in everyone ’ s interest that firms work with us but if a firm doesn ’ t cooperate we can use our powers to force them to provide missing details .
Of course we cannot expect a 100 % success rate . There will always be cases where the contact information held on file hasn ’ t been updated , but we are confident we will be able to reach most people .
We have to impress upon people that there is a need to take action – they did the right thing by seeking advice and it is no fault of theirs that the firms have stopped trading . The task now is how to keep these customers engaged so they can access the help they need .
We are working with the Money Advice Service to ensure there is capacity to help everyone who needs it . For some people who are currently on a Debt Management Plan , this may still be the most appropriate solution , and there are free debt management plans that people can take advantage of .
For many others a different approach may be more appropriate . The Money Advice Service will review customers ’ circumstances and help them decide what to do next . If people decide they want to speak directly to creditors themselves , then we expect those creditors to listen and treat them in the same way that they would treat someone represented by a debt advisor .
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