Carrington Dean will no longer accept referrals from third party debt packager firms from 1 May 2023 in a move to protect customers and ensure best advice.
As the largest independent provider of Protected Trust Deeds (PTD) and Debt Arrangement Schemes (DAS) in Scotland, Carrington Dean recognises its influence across the sector and hopes that the move will encourage other debt solution providers to follow suit in the interest of protecting customers – especially as the cost-of-living crisis continues to drive soaring prices and record numbers turn to credit cards for essentials.
To date, Carrington Dean has implemented robust safeguarding procedures to identify customers that may have been wrongly referred, but agrees with the FCA, Insolvency Service, Accountant in Bankruptcy (AIB) and the not-for-profit sector that, to ensure the best outcome for the customer, the next crucial step is that referral fees should be banned.
A spokesperson at Carrington Dean, said: “Carrington Dean has consistently been a champion of reliable debt support in Scotland but the same can’t be said for some of our colleagues in the debt sector.
“We welcome the FCA’s announcement to ban referral fees and believe that it’ll go a long way in protecting the most vulnerable seeking support. Whilst we’ve always had stringent safeguarding procedures in place, there’s an added peace of mind that the announcement will play a part in helping to reduce mis-selling – especially during the cost-of-living crisis.
“However, reform can’t just end here. As the cost-of-living crisis continues to grip the nation’s purse strings and an increased number of people are looking for debt support, we need to be realistic about resources.
“The not-for-profit sector is an invaluable asset to those struggling but it’s underfunded and under-resourced. The reality of the cost-of-living crisis means people need to be able to get advice on a multichannel basis to suit their lifestyle. That’s where Carrington Dean can step into the gap and continue to offer support.
“We’re seeing an influx of enquiries – up 17% on last year – and speak to c.3000 people on average every month. The demographic of people struggling with debt is dramatically changing, with previously comfortable families’ finances now on a knife-edge. That’s why we’re committed to being on the front line, providing real-time support and investing in technology and staff to meet consumer demand.
“Now is the time for the free and commercial sectors to join forces to help guide people through this crisis and we’d welcome any collaboration with organisations who share our vision to provide reliable, timely and most importantly life changing advice to those in need.”
