FCA in debt counselling spat

A firm stands accused of carrying out debt counselling by the FCA despite its owner claiming the accusations have no commercial basis and it does not charge fees.

In letters seen by Financial Adviser, the FCA contacted Eric Grant earlier this year warning that the firm behind could have breached sections 19 and 21 of the Financial Services and Markets Act 2000 by carrying out debt counselling and inviting or inducing people to engage in investment activity.

In one letter, an FCA employee wrote: “I am in receipt of information showing that your company has provided specific, deliberate advice to particular debtors about the liquidation of particular debts, including but not limited to: how and whether to pay off debts, rescheduling or agreeing temporary halts to paying off debts, releasing debtors from debt and discharging debts or making them irrecoverable.”

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But Mr Grant, who is also the webmaster for the forum, wrote to the regulator saying: “There is no commercial basis to any of our websites and most certainly not the forum.

“The forum does not allow advertising; it is funded 100 per cent by allaboutdebt Limited. There is absolutely no commercial nature on AAD or the forum.”

He said that the site operated in a way similar to other websites offering tips on consumer issues, and referred to those on the forum as “akin to a group of people chatting in a pub”.

But in one FCA letter, an employee wrote: “I consider that the nature of advice you offered clearly went beyond the mere provision of information, but amounted to guidance regarding action to be taken - in this case the liquidation of debts.”

Speaking to Financial Adviser, Mr Grant said: “We are a consumer forum and we fight for a better case. We are quite blunt about that.

“Our aim is to help people who have not got any where else to go.”

Right to reply

An FCA spokesman said: “Those offering debt advice, counselling, management or adjusting are often dealing with financially very vulnerable consumers, who have a right to expect that the organisations offering these services are authorised and are committed to following our rules and standards.

“Where we have concerns that a firm is providing a regulated service without authorisation it is absolutely right and proportionate that we contact them and ask for explanation.”