Holly Lynch – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Holly Lynch on 2016-01-07.

To ask Mr Chancellor of the Exchequer, what support the Financial Conduct Authority has offered to people affected by the recent administration of Brightsource Debt Management; and what steps his Department is taking to ensure that debt consolidation companies make timely payments to creditors so that their customers’ loans are paid down as quickly as possible.

Harriett Baldwin

The Government has fundamentally reformed the regulation of the debt management market, transferring regulatory responsibility from the Office of Fair Trading to the Financial Conduct Authority (FCA) a more robust and better resourced regulator.

The FCA is directing the clients of Brightsource Debt Management towards free debt advice and is engaging with the administrator to ensure the interests of clients are protected.

The FCA require debt management firms which receive client money for the purposes of paying off client debts to pay that money to creditors as soon as is reasonably practical, normally within 5 business days, unless the firm has disclosed to the client that it will hold the money for a longer period in its terms and conditions.

The FCA supervises the market; it has a broad enforcement toolkit to punish breaches of its rules and there is no limit on the fines it can levy.