On 18 January 2021, the FCA wrote to the board of directors at debt firms (being debt purchase, debt collection and debt administration firms) to set out they key risks associated with these types of firms, the FCA’s expectations of them and how it plans to supervise the sector.
In spite of the impact of the coronavirus, which the FCA acknowledges, the letter states that the principal sources of consumer harm remain the same, and broadly emanate from seven drivers that the FCA has grouped into three themes:
- Customer treatment harms;
- Litigation and unenforceable debts; and
- Firms’ prudential resources.
The debt firms that received this letter are expected to reflect on how these harms apply and relate to their own businesses and customers. To read the letter – please click here.