The Financial Conduct Authority (FCA) has published Final Notices for a number of consumer credit firms who have failed to satisfy the regulator that they have the necessary competence to become fully authorised. The latest of these concerns Big T Media Limited (trading as New Start Debt Solutions), who have seen their debt management authorisation application rejected. The firm, based in Nelson, Lancashire, failed to convince the FCA that their fee structure was appropriate, in addition to the concerns identified regarding the competence of the sole director, Mr M Ali.
Firstly, the Notice says that the level of income the firm expects is unclear, with the application predicting “annual income from debt management activities” of £20,000, but “total income from sales fees” as £571,000.
The next issue of concern was that the firm’s advisers were not considering all debt solutions that may be suitable for a particular customer, and that customers were being placed into repayment plans regardless of their circumstances.
The confusing information regarding fees arose because the only charge referred to in the firm’s application was 17.5% of the monthly repayment. However, the firm’s Terms and Conditions refer to charges of £25 and £50 per month being levied, subject to these not exceeding a set percentage of the client’s disposable income. In an interview with the FCA, Mr Ali described the fee structure in a different way once again, as 41% of the monthly repayment for the first six months.
Mr Ali applied to carry out the compliance oversight function at Big T, but the FCA said he had never previously worked in the debt management sector and had not undergone any relevant training. He was unable to satisfactorily answer a number of questions the FCA asked in order to assess his competence. He was also unable to explain why a manager’s job description included duties such as “make recommendations to determine credit amounts” and “setting and changing credit lines/limits”, when the firm was not applying for permission to lend money.
The procedures the firm provided for areas such as compliance monitoring, staff training and assessment of suitability of advice were also very brief and did not provide the level of detail the FCA wants to see in an authorisation application. The firm also gave no details of its arrangements for holding client money.
Regarding Mr Ali’s previous experience, his CV says he was marketing director of another firm between 2007 and 2010, yet Companies House records show the firm was not incorporated until 2011. He also claimed to hold two qualifications for which the FCA could not find any record of their existence, and when challenged he then said he did not hold the qualifications but was interested in attaining them.
Big T Media has chosen not to appeal the FCA decision to the Upper Tribunal.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.