Question to the HM Treasury:

To ask Her Majesty’s Government what mechanisms are in place to ensure that (1) on first contact with potential customers, fee charging debt management companies notify of them of the existence of free debt management services, and (2) such notification is sufficient to produce an awareness of the existence of the free service.

The Financial Conduct Authority has put in place binding requirements on fee-charging debt management firms to signpost customers to free independent debt advice at the first point of contact, including when contacted following a referral from a lead generator.

The FCA is monitoring the compliance of debt management firms with

its rules on an ongoing basis via its supervision of such firms and from 1 October 2014, all debt management firms are required to submit to the full scrutiny of the FCA authorisation process which will involve a comprehensive consideration of all aspects of their compliance.

The FCA is also undertaking an in-depth thematic review of the debt management sector to assess the quality of advice, looking at whether firms are recommending appropriate debt solutions, and how incentive structures and the use of lead generators may be affecting consumers.