The position of those in debt is normally far from hopeless and much can be done to save them from penury. However, they are particularly vulnerable and, as a decision of the Upper Tribunal (UT) showed, the Financial Conduct Authority (FCA) tries its hardest to ensure that those who give debtors advice observe the highest professional standards.
The case concerned a debt management company that had over 1,000 clients, all of whom were members of a minority group who did not have English as their first language. In return for monthly fees, the company negotiated and administered debt management plans with creditors on its clients' behalf.
The FCA had given the company interim consent to carry on the regulated activities of debt adjusting and debt counselling. Full consent was, however, later refused after concerns were raised that the company might not be a fit and proper body to be performing such a sensitive role. That decision meant that the company had to cease its regulated activities immediately.
A hearing of the company's challenge to the refusal was pending before the UT. As a preliminary matter, the company argued that the interim consent should remain in place until the case was decided. It was submitted that it had taken significant steps to address shortcomings in its systems and that the instant withdrawal of its service would prejudice its clients.
In rejecting the application, however, the UT found that the remedial measures taken were insufficient to dispel concerns that focused on the company's record keeping and the accuracy of advice given to clients. There was a risk that clients' interests might be harmed if the company continued to provide regulated advice, even in the short term. The UT also declined to restrict publication of the FCA's decision until after the substantive hearing.