What follows is the regulation rather than the sales pitch. Who may act on a Scottish statutory solution, what the Financial Conduct Authority requires of any firm giving debt advice, and what free debt advice is available in Scotland as a directory.

No. Free, regulated help is available nationally and from your own council, and on a Debt Payment Programme the debtor cannot lawfully be charged.

Where the free advice comes from

• Citizens Advice Scotland, through bureaux across the country.
• StepChange Debt Charity, which runs a Scottish service and is a registered Scottish charity.
• National Debtline, part of the Money Advice Trust, for telephone and online advice.
• Your council’s own money advice or welfare rights team, with mygov.scot’s directory of support with money and debt listing the national services and mygov.scot covering debt and diligence generally.
• The Accountant in Bankruptcy, for the statutory schemes it administers.

Money Advice Scotland is often listed alongside those and it is a different kind of body. It is the membership body for money advisers rather than a public advice line, and it directs members of the public to Citizens Advice Scotland.

How free services are funded

They are paid for by the credit industry, by the debt advice levy, by grants and by donations rather than by the client. StepChange describes creditors receiving payments from its plans as making a percentage-based contribution.

That funding model is why free does not mean basic. These services set up Debt Payment Programmes, apply for statutory moratoriums and deal with sheriff officer firms as routine work, which is the subject of where you go for help to stop a wage arrestment.

One advantage a council team has

A council money adviser can look at your council tax account, Council Tax Reduction, discounts and exemptions in the same conversation as the debt. Our council tax debt advice page covers what that conversation should include.

An approved money adviser, and not you. Regulation 7 of the Debt Arrangement Scheme (Scotland) Regulations 2011 requires you to have one, and regulation 20(2)(a) requires the application to be made by that adviser on form 1.

The approved categories

Those categories come from the 2011 Regulations as reflected in the Accountant in Bankruptcy’s own guidance on becoming an approved money adviser.

And they cannot charge you

Regulation 17(1)(a) says a payments distributor must make no charge of any kind to a debtor. For individuals, SSI 2019/315 provides that money advisers cannot charge fees either, in force from 4 November 2019.

So the machinery of a Debt Payment Programme is free at the point of use, whoever arranges it. Business DAS is the exception, because insolvency practitioners do charge for business applications.

Debt counselling and debt adjusting are regulated activities, so any firm doing either by way of business needs Financial Conduct Authority authorisation. Not-for-profit bodies are not exempt from that.

The two regulated activities

Article 39E of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 makes giving advice to a borrower about the liquidation of a debt a specified activity. Article 39D covers debt adjusting, which includes negotiating terms with a lender on your behalf.

Both permissions are checkable. A firm should hold debt counselling and debt adjusting, and some carry limitations on what they may do.

What the conduct rules require

Chapter 8 of the FCA’s Consumer Credit sourcebook applies to every firm doing this work, including not-for-profit bodies. CONC 8.3.2R requires advice and action to have regard to your best interests and to be based on a sufficiently full assessment of your circumstances.

CONC 8.2.2G adds that advice must have regard to the different debt solutions and enforcement procedures across the different countries of the United Kingdom. That one matters in Scotland, where the solutions and the diligence are not the English ones.

CONC 8.3.7R requires a firm to point you to impartial sources of information and to refer you to a not-for-profit body where that is appropriate. CONC 8.3.4R requires the advice in a durable medium, naming which debts are in and out and warning of the serious consequences.

Vulnerability and the Consumer Duty

CONC 8.2.7R requires firms to have policies for identifying and appropriately treating particularly vulnerable customers, and CONC 8.2.8G recognises that debt advice customers are inherently more likely to be vulnerable. The Consumer Duty sits on top of that.

Its cross-cutting obligations are to act in good faith, to avoid causing foreseeable harm, and to support customers in pursuing their financial objectives. If debt worry is part of the picture, where you can get free mental health support for debt worry lists the services.

The financial statement that goes to your creditors

CONC 8.5.1R requires the statement sent to lenders to be accurate and realistic and to present a sufficiently clear and complete account of your income, expenditure, debts and surplus. Fees must be disclosed in it and you must confirm it is accurate before it goes.

CONC 8.5.3G then requires any repayment offer to be realistic and sustainable out of your disposable income, taking account of taxes, fines, child support and debts tied to essential services or housing. That is a rule against optimistic offers, and it protects you rather than the creditor.

They are obligations on the firm rather than good practice. The central one is that a firm must not structure its fees so that they come ahead of repayments to your creditors.

The rules, in the Handbook’s own terms

What to do with that list

Read it as a set of questions to put to any firm before you sign. Ask for the total fee in pounds, ask whether it comes out of your monthly payment before creditors are paid, and ask what happens to money already paid if you cancel.

A firm that will not let you take the paperwork away and read it has told you something useful. None of these questions is unreasonable and all of them have documented answers.

In most of them the scheme’s own costs already come out of the money you or your creditors are paying. A separate advice fee on top buys service, not the solution.

The costs of the schemes themselves

Our debt solutions page sets out how each route works, and which debt solution is best if you have a wage arrestment compares them against a live deduction.

That does not make a paid firm wrong

It means you should know precisely what the extra money buys that the scheme does not already cover. Usually the honest answer is speed, a named contact and help assembling the paperwork.

Search the Financial Conduct Authority’s public register yourself, and check the firm holds permission for debt counselling and debt adjusting. The FCA’s own line is that advice from an unauthorised firm may be wrong, misleading or not in your best interests.

Watch for lead generators

The FCA warns about firms that collect your details through social media questionnaires and cannot themselves give debt advice. They may push a particular product because they receive a referral payment, and some impersonate legitimate charities.

Those firms often rank well in search results. The Register is the check that settles it, and the FCA maintains a Warning List alongside it.

What happens if something goes wrong

Expect a response to a complaint within eight weeks, then escalation to the Financial Ombudsman Service within six months of the firm’s response. Ask for the complaints procedure in writing before you sign rather than afterwards.

Where a firm holds client money under a plan and fails, the Financial Services Compensation Scheme covers a shortfall up to £85,000 per eligible person per firm, for failures on or after 1 April 2019. It does not cover the advice itself.

Start with a free service, because it costs nothing to find out where you stand. If you then want faster or more hands-on support you can choose to pay, knowing what you are buying.

The two routes compared

When free advice is likely to be enough

• One debt, or a small number of them.
• Council tax arrears are the main problem and your council has a money advice team.
• You are comfortable filling in forms and making the calls yourself.

When paid support may appeal

• An arrestment is already running and you want a single named contact throughout.
• Several creditors, irregular income, or a business involved.
• Work patterns that make daytime appointments hard.

The thing that actually costs people money

It is not choosing the wrong adviser. It is choosing none, because paying for help feels out of reach, while a wage arrestment carries on taking money every pay day.

There is no penalty for a second opinion either. Two advisers looking at the same budget should reach broadly similar conclusions, and a difference between them is worth understanding.