Go to ...
- Why does authorisation matter?
- How do you search the Financial Services Register?
- Which permissions should a debt management firm hold?
- How do you tell an adviser from a lead generator?
- What does authorisation guarantee, and what does it not?
- What protection do you have if something goes wrong?
- What should you check before you sign anything?
- Related guides
- Frequently asked questions
Search the firm on the Financial Services Register and check it holds permission for debt adjusting and debt counselling. Read the permissions rather than stopping at the fact that an entry exists.
The Financial Conduct Authority’s own advice is to check the register to make sure the person or firm you are dealing with is authorised and has permission for the services it is offering you.
Part of your pay is protected by law
The deduction is set by statutory tables, not the creditor
An arrestment can be stopped or replaced
Been contacted by a debt management firm? Check it is authorised before you sign.
Free & confidential
No obligation
★★★★★Rated 5 stars on Google
No obligation
★★★★★Rated 5 stars on Google
The check takes a couple of minutes and costs nothing. It is far easier than unpicking a problem after you have handed over bank details.
Authorisation is not a quality mark, and this page is as much about what it does not tell you as what it does.
Why does authorisation matter?
It is what brings the firm inside the rulebook, the complaints system and the compensation scheme. Outside it, none of those reach you.
The activities are regulated
Advising on the liquidation of a debt due under a credit agreement is debt counselling under article 39E of the Regulated Activities Order, and negotiating terms with a lender for you is debt adjusting under article 39D.
A firm running plans as a business needs both, and the Handbook definition of a debt management plan assumes a third party administering it and distributing the money.
What it brings with it
CONC 8.3.2 is a rule about the advice a firm gives and the action it takes for you, and the Consumer Duty in PRIN 2A applies as well.
The Financial Conduct Authority warns that you will not have access to the Financial Ombudsman Service if you want to complain about an unauthorised firm.
Charities are authorised too
CONC 8.1.1, which is a rule, applies the chapter to every firm carrying on debt counselling or debt adjusting. CONC 8.1.2, which is guidance, says that includes profit-seeking as well as not-for-profit bodies holding such permissions.
StepChange publishes its own Firm Registration Number, 729047, on its funding page, and Christians Against Poverty says on its Scottish page that it is authorised and regulated by the Financial Conduct Authority.
How do you search the Financial Services Register?
By legal name or firm reference number at the register, then by reading the entry. The name on a website is often a trading name rather than the company you would be contracting with.
The six steps
| Step | What to do | What you are looking for |
|---|---|---|
| 1 | Find the firm's legal name and firm reference number | Usually in the website footer or the terms. The reference number is usually six digits |
| 2 | Search that name or number on the register | An entry that matches exactly, rather than one with a similar name |
| 3 | Check the status of the entry | That the firm is currently authorised rather than lapsed or no longer authorised |
| 4 | Open the permissions | Debt adjusting and debt counselling, both present |
| 5 | Read any limitations on those permissions | Wording that restricts what the firm may actually do |
| 6 | Compare the contact details with the ones you were given | A different phone number, website or address is a warning sign |
A legitimate entry lists trading names as well as the legal one. If you cannot match the website to the entry, ask the firm which entity you would be signing with.
What an entry looks like when it is right
The status line reads that the firm is authorised, and the permissions section lists the regulated activities by name. Trading names appear under the legal entity.
Screenshot it or note the date you looked. Permissions change, and a check is only good for the day you made it.
Check the Warning List too
The Financial Conduct Authority publishes a Warning List of firms and individuals running scams or operating without authorisation, and a consumer helpline on 0800 111 6768.
Do it before you give anyone your bank details
The check is worth most before the first payment leaves your account. Money already sent to the wrong firm is the hardest thing to recover.
Which permissions should a debt management firm hold?
Debt adjusting and debt counselling. The Financial Conduct Authority defines debt management as those activities carried on with a view to a particular debt solution, and activities connected with them.
Limitations are the part people miss
A permission can be limited. The Financial Conduct Authority’s own example of limitation wording is “Limited to debt adjusting excluding the conclusion or administration of debt management plans”.
A firm can therefore be authorised and still not permitted to do the thing you are asking it to do. That is why the entry alone is not the answer.
Some rules bind commercial firms only
The Handbook’s defined term debt management firm expressly excludes a not-for-profit debt advice body, so a rule addressed to a debt management firm does not bind the charities.
That is a point in the charities’ favour rather than against them. They are authorised, and some of the rules written for fee-charging firms simply have nothing to bite on.
And there are exclusions in the Order
Chapter 7B of the Regulated Activities Order contains exclusions at articles 39H to 39L, covering matters such as a person connected to the agreement, certain energy suppliers and members of the legal profession.
Whether any of them applies to a particular firm you are dealing with is not something to settle from a guide. Ask the firm which permission or exclusion it is relying on.
Not sure who you are dealing with? Get free help in under 60 seconds
How do you tell an adviser from a lead generator?
By what they are allowed to do. The Financial Conduct Authority says lead generators should only take basic information about your debts and give factual information about products.
The tell-tale signs
- A form that asks for your debt level and phone number before anything else.
- A promise about writing off a percentage of your debt.
- Pressure to decide on the call.
- No named legal entity or firm reference number anywhere on the site.
Who is actually going to advise you
Ask whether the person you are speaking to works for the firm whose name is on the register. A call handler passing you on is not the same as an adviser.
Ask what happens to your details if you do not go ahead. A firm that cannot answer that question clearly is not the one to hand a bank statement to.
What that means for Scotland
Pages selling debt solutions often describe English ones. A page offering you an individual voluntary arrangement or a debt relief order is not describing anything available here, and the Scottish comparison sets out the routes that are.
A free service is still a regulated one
Charities carrying on these activities hold the same permissions as anyone else. Free does not mean unregulated, and it does not mean unchecked.
You never have to pay for debt advice
StepChange and Christians Against Poverty set plans up and run them free of charge.
National Debtline and Citizens Advice Scotland give free advice on whether a plan is the right answer, without administering one for you.
The distinction matters when you are deciding who to telephone, and whether plans are free or charge fees sets out who pays for what.
What does authorisation guarantee, and what does it not?
It guarantees a rulebook and a route to complain. It does not guarantee the advice, the fees or the outcome.
The honest list
| The point | What it actually means |
|---|---|
| The firm is inside the consumer credit rulebook | CONC 8 and CONC 7 apply to it, along with the Consumer Duty in PRIN 2A |
| You can complain to the Financial Ombudsman Service | The Financial Conduct Authority warns that you will not have that route with an unauthorised firm |
| Client money it holds is within the compensation scheme | Up to £85,000 per eligible person, per firm, for failures on or after 1 April 2019 |
| It does not mean the plan has been approved | The regulator authorises the firm, not the arrangement it sells you |
| It does not mean the fees are approved | There is no cap on what a commercial firm may charge |
| It does not mean the firm may do what it is selling you | A limitation can exclude administering debt management plans altogether |
So the register answers one question. How to set a plan up covers the rest of the decision.
It says nothing about the outcome either
No firm can promise you what your creditors will do or what your credit file will look like. A promise of either is a reason to walk away rather than a reason to sign.
Nothing about authorisation reaches your creditors
No creditor has to accept a debt management plan, and nothing requires one to give a reason for refusing.
An authorised firm cannot make a creditor do anything, and whether creditors have to accept sets that out.
What protection do you have if something goes wrong?
A complaint to the firm, then to the Financial Ombudsman Service, and compensation cover on client money the firm holds for you.
The compensation scheme
| What is at stake | The cover |
|---|---|
| Client money held under a plan on or after 1 April 2019 | Up to £85,000 per eligible person, per firm |
| Client money held between 1 April 2018 and 31 March 2019 | Up to £50,000 per eligible person, per firm |
| Debt advice itself | Not covered |
| Money paid under an individual voluntary arrangement | Not covered, and an individual voluntary arrangement is not a Scottish solution anyway |
Those figures and dates come from the Financial Services Compensation Scheme, which sets out what it does and does not cover for debt management.
What the scheme is for
It covers money the firm was holding for you rather than the debt itself. The debts stay owed to your creditors whatever happens to the provider.
That is another argument for a provider that holds nothing. A charity plan takes nothing out of your payment and passes it straight on.
Complaints
Complain to the firm first and give it the chance to answer. Being authorised is what makes the ombudsman route available afterwards.
And you can leave
A plan is not a contract you are locked into for a term. Switching provider sets out how to move, including to a free provider.
What should you check before you sign anything?
The contract and the fees. CONC 8.4.1 is a rule requiring a written contract setting out the terms and conditions.
What the rules give you
CONC 8.4.2 requires the contract to set out the duration and the conditions for cancelling, and CONC 8.7.6, also a rule, prohibits taking any payment before the firm has entered into a contract with you or accepting fees by credit.
CONC 8.3.11, a rule since 2 June 2023, bans a firm from taking any commission or fee from a debt solution provider, and the fees article goes through what a commercial firm may charge.
The questions to ask on the call
- Which legal entity am I contracting with, and what is its reference number?
- Are you authorised for both debt adjusting and debt counselling?
- Are there any limitations on those permissions?
- What comes out of my monthly payment before my creditors are paid?
Read the fee section twice
The question is what leaves your payment before your creditors see any of it. Ask for the figure in pounds rather than as a percentage.
And check the route is right for Scotland
An authorised firm can still sell you an arrangement that fits your circumstances less well than a statutory one. Which budget information you need and whether you can run a plan yourself cover the alternatives.
Frequently asked questions
Where do I check a debt management company?
On the Financial Services Register, by the firm’s legal name or its firm reference number. The name on the website is often a trading name rather than the company itself.
Which permissions should it hold?
Debt adjusting and debt counselling. Those are the regulated activities in articles 39D and 39E of the Regulated Activities Order.
Does being on the register mean the firm is any good?
No. It means the firm is inside the rulebook and can be complained about to the Financial Ombudsman Service, not that the regulator has approved its plan, its fees or its advice.
What is a limitation on a permission?
Wording that restricts what the firm may do. The Financial Conduct Authority’s own example excludes the conclusion or administration of debt management plans.
Do charities need authorisation too?
Yes. CONC 8 applies to every firm carrying on debt counselling or debt adjusting, and its guidance says that takes in not-for-profit bodies holding such permissions.
Is my money protected if the firm fails?
Client money held under a plan is covered up to £85,000 per eligible person, per firm, for failures on or after 1 April 2019. Debt advice itself is not covered.
What is a lead generator?
A firm that collects your details and passes them on. The Financial Conduct Authority says such firms should only take basic information and give factual information, and are not authorised to advise you.
Can a firm take a payment before I sign?
No. CONC 8.7.6 is a rule and it prohibits requiring or taking any payment before the firm has entered into a contract with you.
Get free, confidential help with your debts today
Free, confidential advice on where you stand and what can be stopped.
Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.