Credit Strategy – CS – News

These firms will be required to have an FCA license for debt adjustment and counseling from 6 December 2022. Insolvency practitioners will no longer be allowed to advertise these services.

Additionally, advertisers must successfully complete the updated verification process by the time the application begins on January 16 next year. The policy update also allows advertisers listed on the FCA’s Financial Services Register as “exempt professional companies” or recognized investment exchanges to be verified as FCA-approved advertisers in the UK. United.

In response, charity StepChange welcomed the announcement, but said the policy was still “widely circumvented by unscrupulous companies”, leading to further action by the Advertising Standards Authority on the basis of contributions from the debt advice sector.

Despite this work – as well as that of the FCA in conjunction with the Insolvency Practitioners Association – misleading advertising has remained prevalent across search engines and social media sites.

StepChange Managing Director Phil Andrew said: “The fact that these misleading advertising problems have persisted for so long, despite so much class action to try to resolve them, is a terrible indictment of the price incentives that can provide conditions conducive to poor sales. debt solutions for financially vulnerable people.

“While it is to the credit of Google, as well as the Advertising Standards Association, that they continue to try to improve the framework in which such advertising can occur, I am concerned that these efforts – although they are welcome – rather treat the symptom than the cause of the problems.

“It is the functioning of the IVA market that is the underlying cause of the difficulty. As we have long pointed out, the failure rate of IVAs in the wider market is about double that of those organized by StepChange. We believe that the overselling and mismanagement of IVAs is a real problem, and that there is an urgent need to tackle it through regulators.

“Removing misleading advertising is a good step, but until anyone getting an IVA is required to first go through an FCA-regulated debt counseling process to ensure that this is truly the right solution for his needs, the problems are likely to continue.”