MEMA Scope · Assessment
Do debt management and debt advice firms need FCA authorisation?
A firm advises individuals about their debts, sets up repayment arrangements and negotiates with creditors on their behalf, often for a fee. Review the initial view below and answer a few questions to refine it.
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Potential regulated activity identified
Debt adjusting and debt counselling may require FCA authorisation
Advising borrowers on debts and negotiating with lenders on their behalf are regulated activities unless an exclusion applies.
Route to consider: Direct authorisation (full permission)
Why this was flagged
- 1Negotiating with a lender on a borrower’s behalf to discharge a debt is debt adjusting.
- 2Advising a borrower on dealing with a debt is debt counselling.
Questions still to resolve
Answer to refine the view. The result updates as you go.
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Do you receive money from customers to pass on to creditors?
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Do you also collect debts or administer agreements on behalf of lenders?
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Do you work under an authorised firm that takes regulatory responsibility for you?
Regulatory basis to examine
Your next steps
- 1Confirm which of your services are adjusting, counselling or both
- 2Check whether any exclusion applies, for example where you are connected to the lender
- 3Set up customer money handling and fee disclosure
- 4Build a vulnerable customer framework
Where applications for this model most often fall short
- Fee disclosure and suitability of solutions
- Client money controls and reconciliations
- Vulnerable customer processes and staff training records
This is an initial indication from published FCA material, not an FCA determination or legal advice.
If authorisation is required, check the firm’s governance, policies, resources and application preparedness.
MEMA Scope gives an initial view from published FCA material. It is not legal advice or an FCA determination. Automatic matching and typed questions use AI only to choose a profile and to answer from vetted guidance; the assessment itself is never written by AI.
About this business model
A firm advises individuals about their debts, sets up repayment arrangements and negotiates with creditors on their behalf, often for a fee.
Advising borrowers on debts and negotiating with lenders on their behalf are regulated activities unless an exclusion applies.
This page gives an initial view from published FCA and legislation sources. It is not an FCA determination or legal advice. Not your business model? Describe your business in MEMA Scope.
Debt management or debt advice firm: frequently asked questions
Does a debt management company need FCA authorisation?
Negotiating with lenders for a borrower is debt adjusting and advising on a debt is debt counselling. Both are regulated activities under RAO Arts.39D and 39E unless an exclusion applies.
What is debt counselling under PERG?
PERG 17 sets out the elements of debt counselling, including that the advice must relate to a particular debt and debtor.
What could change the answer for debt management and debt advice firms?
Advising borrowers on debts and negotiating with lenders on their behalf are regulated activities unless an exclusion applies. It can change depending on the answers to questions such as: Do you receive money from customers to pass on to creditors? Do you also collect debts or administer agreements on behalf of lenders? Do you work under an authorised firm that takes regulatory responsibility for you?
Which FCA rules should debt management and debt advice firms look at first?
Start with: Debt adjusting; Debt counselling; PERG 17: consumer credit debt counselling; Arrears, default and recovery. This is an initial view from published FCA material, not an FCA determination.
What are the first steps for debt management and debt advice firms?
Confirm which of your services are adjusting, counselling or both. Check whether any exclusion applies, for example where you are connected to the lender. Set up customer money handling and fee disclosure. Build a vulnerable customer framework.
Businesses we check
MEMA Scope covers 32 common business models. Each page explains whether that kind of business may need FCA authorisation, the rules to look at and the routes to consider.
Consumer credit
- Do car dealers offering finance need FCA authorisation?
- Do motor finance brokers need FCA authorisation?
- Do retailers offering buy now pay later need FCA authorisation?
- Do consumer lenders need FCA authorisation?
- Do debt collectors and debt administrators need FCA authorisation?
- Do credit lead generators and comparison sites need FCA authorisation?
- Do rent-to-own and vehicle leasing providers need FCA authorisation?
- Do credit brokers introducing customers to lenders need FCA authorisation?
Payments and e-money
- Do payments apps and payment processors need FCA authorisation?
- Do small payment institutions need FCA authorisation?
- Do e-money issuers and digital wallets need FCA authorisation?
- Do agents of payment institutions need FCA authorisation?
- Do open banking providers need FCA authorisation?
- Do money transfer and remittance businesses need FCA authorisation?
- Do marketplaces handling payments need FCA authorisation?
Insurance
Mortgages
Investments and wealth
- Do financial advisers need FCA authorisation?
- Do discretionary investment managers need FCA authorisation?
- Do investment platforms and wealth-tech firms need FCA authorisation?
- Do crowdfunding and peer-to-peer lending platforms need FCA authorisation?
- Do corporate finance boutiques need FCA authorisation?
Other regulated activities
- Do claims management companies need FCA authorisation?
- Do funeral plan providers and sellers need FCA authorisation?
- Do introducers and referral partners need FCA authorisation?
- Do international firms entering the UK need FCA authorisation?
- Do accountants and solicitors giving financial advice need FCA authorisation?
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