End of implementation period for debt packager referral fee ban

In view of the fact that on October 2, 2023, the transitional period in relation to the ban on referral fees for debt packagers officially ended, the Financial Conduct Authority (FCA) had published a press release.
In it, the regulator reminds firms that beginning October 3, 2023, all debt packager firms must be in compliance with the ban – in accordance with policy statement (PS23/5) of June 2023. This means that debt packager firms that benefited from the transitional period which was in place up to October 2, 2023 are no longer allowed to receive any commission, fees, or other financial consideration (referral fees) from debt solution providers for referrals or related services.
However, the ban does not apply if the firm has a pre-existing contractual right to payment for the referral or related services for a particular customer established prior to October 3, 2023. Additionally, any new debt packager firms or those restarting their debt packager business, including newly appointed ARs, have been subject to the ban since June 2, 2023.