Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what systems his Department has for monitoring and regulating debt recovery companies.

The government has fundamentally reformed regulation of the consumer credit and debt management market. Responsibility for regulation was transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) in April 2014.

The FCA has turned key elements of the OFT’s Irresponsible Lending Guidance into binding rules, actionable with the full range of FCA enforcement powers. These rules strengthen consumer protection and provide greater clarity to firms on what is expected of them and the sanctions if they lend irresponsibly. Firms are also required to comply with the FCA’s high-level principles, including ‘treating customers fairly’. Lenders must also show forbearance if there is evidence of financial difficulty.

The FCA’s detailed rules can be found online at https://www.handbook.fca.org.uk/handbook/CONC.pdf.

The FCA proactively monitors the market, and can use its broad enforcement powers where it finds wrongdoing - there is no limit on the fines it can levy and it can force firms to provide redress to consumers. The FCA can also use its flexible rule-making powers where it deems it necessary it to protect consumers.

The government firmly believes that the new FCA regime is helping to deliver a higher standard of consumer protection in the debt management market.