On 2 June 2023, the FCA published Policy Statement PS23/5: Debt packagers: feedback to CP23/5 and final rules (PS23/5).

In CP23/5, the FCA set out proposals to ban referral fees and other forms of commission or remuneration, paid by debt solution providers to debt packagers, following the previous consultation (Consultation Paper 21/30).

In PS23/5, the FCA summarises the feedback received to CP23/5 and the FCA’s response. The FCA also sets out the final rules introducing the ban.

The final rules include:

  • Where CONC 8.3.11R applies, existing debt packager firms must ensure they do not receive any commission, fee or any other financial consideration from a debt solution provider for any referral or related service conducted after 2 October 2023.
  • Any firms who act as principal to appointed representatives who would fall under the scope of the ban if they were an authorised person must take all reasonable steps to ensure that these appointed representatives also comply with the ban, as required under CONC 8.3.16R by 2 October 2023 (subject to CONC 8.3.11R(2)).
  • Firms who start, or restart, carrying out debt packager business from 2 June 2023 will be subject to the ban immediately and will not benefit from the four month implementation period. The rules also apply with immediate effect to principals with respect to any appointed representatives carrying out debt packager activity who are appointed on or after 2 June 2023.
  • The ban will not apply to not-for-profit debt advice firms or to regulated providers of debt solutions (including debt management plans) who have a different business model to debt packagers).

The FCA has also introduced new perimeter guidance intended to make it clear that referring customers to debt solution providers who only offer one solution could fall under the regulated activity of debt counselling.