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Money Advice Trust welcomes FCA’s ban on debt packager referral fees

The Money Advice Trust responds to the FCA's decision to ban referral fees for debt packager firms

Posted June 2, 2023

The Money Advice Trust has welcomed today’s decision by the FCA to ban referral fees for debt packager firms. The ban applies to all new debt packager firms from today, and will come into play for existing firms in October 2023, and follows a review that found “evidence of debt packagers appearing to manipulate customers’ details so that they meet the criteria for IVAs/PTDs and using persuasive language to promote products without explaining the risks involved”. Some of the worst cases identified by the FCA included:

  • One consumer, who was homeless, was recommended an IVA costing them £6,000 when they could have been debt free in one year via a DRO for £90.
  • Another consumer was recommended an IVA by a debt packager when a different solution would have been more suitable. This cost them an extra £4,710 compared to a DRO and meant it would take five years longer to become debt free.

Responding to the decision, Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline said:

“The FCA’s ban on referral fees for debt packager firms is welcome and marks an important step in tackling the harm caused by this practice.

“Our advisers have seen the impact of this activity, with people saddled with high fees and a debt solution that simply isn’t right for them - all of which can set back their route out of debt by many years.

“With budgets under ever increasing strain, ensuring anyone in financial difficulty can access free, and independent debt advice is more important than ever.

“The Insolvency Service need to now match this action, by ending the practice of Insolvency Practitioners paying lead generator firms to direct people in financial difficulty toward potentially unsuitable debt solutions.

“You should never have to pay for debt advice. I would urge anyone worried about their finances to contact a free debt service like National Debtline as soon as possible”

National Debtline provides free, independent debt advice at

Business Debtline provides free independent advice for people who are self-employed and small business owners at

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