Letter from Dean Beale, | Release Date: 20th July 2021
To read a longer summary of this letter from Dean Beale, click here.
To access the original FCA document, click here.
Short Summary
Dean Beale, Chief Executive of the Insolvency Service, wrote to Sheldon Mills at the Financial Conduct Authority (FCA), summarising their discussions on problematic practices among debt packagers and outlining collaborative strategies to mitigate these issues.
Key points from the letter include:
- Regulation of Referral Payments: The Insolvency Service is evaluating the fairness of payments made for IVA referrals, aiming to ensure they are justified compared to those for debt management plans.
- Ensuring Compliance in Referrals: There are plans to revise the Statement of Insolvency Practice 3.1, mandating that Insolvency Practitioners only accept referrals from FCA-regulated debt packagers. This revision will undergo a standard consultation process.
- Advertising and Marketing Oversight: Joint guidance on the advertising of debt advice has been issued, defining responsibilities under the Insolvency Code of Ethics and highlighting poor practices. Enforcement involves coordination with the Advertising Standards Authority and other regulatory bodies.
- Intelligence Sharing and Monitoring: The Insolvency Service and FCA regularly exchange intelligence on specific cases to ensure swift regulatory action. A complaints gateway facilitates the sharing of relevant information with the FCA.
- Review of Personal Insolvency Framework: A comprehensive review is anticipated, starting with a Call for Evidence. The FCA is expected to collaborate closely in this review.
- Optimisation of Formal Gateways: Efforts are underway to enhance gateways for sharing intelligence and executing regulatory actions, led by the Insolvency Practitioner Regulation team.
Key Actions:
Firms must align with new regulatory standards, ensuring all referrals and marketing practices comply with updated guidelines. Ongoing engagement in the review processes and contribution to forthcoming consultations are crucial.