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Debt Management Guidance Notes

The Debt management guidance sets out the standards the TSI expects from businesses engaged in debt management (and credit repair services) if they are to be considered fit to hold a licence.

The guidance provides examples of ‘unfair or improper practices’ which, if engaged in, could render a business unfit to hold a consumer credit licence and operate in the market.

Examples of unfair practices include:

  • Sending unsolicited marketing text messages, email or voicemails.
  • Providing inappropriate financial incentives to staff giving debt advice, which may encourage them to promote unsuitable debt management products for personal gain.
  • Making false or misleading claims regarding the status of the business, for example operating websites which look like the website of a charity or a government body.

Businesses are also expected to refer consumers to not-for-profit advice organisations for further help, in certain circumstances, and to have effective measures in place to identify and deal with particularly vulnerable clients, such as those with mental capacity issues.

An overall theme of the guidance is for businesses to be transparent so that consumers have all the information necessary to make informed decisions about the most appropriate debt solutions for them given their financial circumstances.

The guidance builds on enforcement action taken following a compliance review of the sector in 2010, which identified widespread concerns, including problems with advertising and marketing practices and the quality of advice given.