On 17 November 2021, the FCA published Consultation Paper 21/30 ‘Debt packagers: proposals for new rules’ (CP21/30).

The proposals in CP21/30 applies to debt packager firms and appointed representatives who act as debt packagers. The FCA proposes banning debt packager firms from being paid to refer customers to other firms. This proposal is intended to address the concern that the strong conflict of interest present in the debt packager business model leads to firms not complying with the FCA’s rules, which creates a risk of harm to consumers. This can lead to harm where consumers end up on debt solutions which require them to make payments which they cannot afford or missing out on alternative, cheaper solutions which may be more appropriate to their needs.

The deadline for comments on CP21/30 is 22 December 2021.

Subject to the consultation, the FCA expects that new rules could come into force in April 2022.