The Financial Conduct Authority (FCA) has refused an application for consumer credit authorisation from Steven Maoudis (who trades as as Montana Debt Management). The FCA has concerns over the competence of Birmingham-based Mr Maoudis, and over the level of protection provided to his clients.

Mr Maoudis applied for full permission to carry out debt counselling and debt adjusting. Since April 2014 he has held interim permission to carry out these activities, as well as credit brokerage and debt administration.

The FCA has serious concerns over the advice process used by Montana. The firm only offers debt management plans (DMPs) and full and final settlement plans, and does not offer debt relief orders (DROs), individual voluntary arrangements (IVAs) or other forms of debt solution.

The first concern the regulator has is that Mr Maoudis lacks the knowledge to judge whether a DMP is more suitable than an alternative arrangement, such as a DRO, an IVA or bankruptcy. When questioned by the FCA, he displayed insufficient knowledge of the eligibility criteria for a DRO, could not explain the advantages and disadvantages of bankruptcy or an IVA, and did not know that a Magistrates’ Court fine would not be covered by a DRO.

In addition, Mr Maoudis said that were he to decide that an IVA or bankruptcy was suitable for a client, he would refer them to his ‘advisory board’. However, the FCA noted that, regardless of what the advisory board’s actions were, Mr Maoudis would retain responsibility for the advice. As previously mentioned, they believed he lacked the necessary knowledge and competence to provide suitable advice, or even to decide when a referral to the advisory board would be appropriate. The FCA also says that issues referred to his advisory board so far have solely concerned legal and accountancy matters, rather than debt advice.

Mr Maoudis also uses a system whereby clients are expected to carry out their own research into available debt solutions by reading information on his website. The FCA believes that in doing so, Montana is not complying with its rules, which require firms to provide clients with sufficient information about options regarded as suitable for the clients, and to explain the reasons why these options are considered suitable and other options unsuitable.

As the sole director of the firm, Mr Maoudis also failed to explain in his business continuity plan how he would ensure continuity of service to clients were he to be absent from the firm.

In summary, the regulator says it does not believe that Mr Maoudis satisfies two of its Threshold Conditions: 2D (Appropriate resources) and 2E (Suitability).

Mr Maoudis has appealed the FCA decision to refuse his application 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.