All debt management plans must be reviewed at least once a year. If a customer does not cooperate with a review or respond to requests for information, the firm must take reasonable steps to encourage the customer to engage with the review process. The FCA says firms cannot just conduct a ‘desk-based review’ based on old information that is increasingly likely to have become inaccurate over time.
Where a consumer continues to not engage with a firm and the firm cannot be confident from the information that it holds that the plan remains appropriate to the consumer’s financial circumstances, it may be sensible for the firm to consider lawfully ending its involvement in the consumer’s debt management plan. Advice provided during an annual review must be given to the customer in a ‘durable medium’. This means that if advice is given on the phone, written confirmation must be sent to the customer.
The FCA says it will take further action if a firm does not comply with the expectations and rules set out in our letter. We can also take this into account when we review a firm’s application for authorisation.