Poor standards in credit broking and debt management can lead to significant harm for vulnerable consumers, and we started to intervene in these markets in 2014.
Between April and October 2014, 41% of complaints we received about consumer credit related to credit broking, with around 80% of these being about online brokers charging upfront fees. We banned brokers from charging fees and requesting customers’ payment details unless they provide clear and transparent information to consumers who then acknowledge receipt of the information.
Our thematic review of the debt management sector in 2014 found that the quality of advice provided by fee-charging providers was of an unacceptably low standard. Some firms lacked the fundamental governance and infrastructure needed to manage the risk of providing unsuitable advice. This resulted in several past business reviews, which required firms to pay redress to customers who have been treated unfairly.
In March 2019, our second thematic review of the sector found improvements in the standard of advice and outcomes for customers. Debt management remains a priority and we will closely monitor and intervene where firms fail to meet our standards.
Price comparison websites
Our review of price comparison websites comparing HCSTC products found that the way these products were shown was often influenced by the commercial relationship between the website and the lender. Our new rules and guidance, which came into force in December 2016, require search results to be shown transparently with the cost going from lowest to highest amount payable.