Thursday, 18 December 2014 10:12
Debt firm to pay £185,000 compensation in an FCA first
The Financial Conduct Authority has announced that debt management firm Harrington Brooks will voluntarily pay over £185,000 in compensation to over 4,500 customers after communications from the firm to creditors on customers' behalf were delayed.
Harrington Brooks is the first debt management firm to agree a redress package since the FCA took over responsibility for regulating the sector on 1 April 2014.
Linda Woodall, director of mortgages and consumer lending at the FCA, said:
"Debt management customers are struggling financially and often in difficult situations so it's important that when people are putting their trust in a firm, they get the service they have paid for.
"When things go wrong we expect firms to put them right for their customers and we are pleased that Harrington Brooks is working with us to do this."
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In September 2014, Harrington Brooks advised the FCA that communications with some customers' creditors had been delayed, meaning customers may have been left with the impression that the firm had been in contact with creditors when it had not. The delay resulted in some people owing more in interest and charges than if the firm had contacted creditors sooner.
The FCA said customers were affected by the delays in two ways:
· Customers' creditors were not written to in a timely manner, meaning that interest and charges on their debts were frozen late;
· Customers were not written to in a timely manner following the outcome of the Harrington Brooks' negotiations with creditors on their behalf. This delay meant that customers were not notified that interest and charges on their debts had not been frozen.
Officials said Harrington Brooks has cooperated with the FCA's requests and will be writing to affected customers in the coming weeks.
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Harrington Brooks is the first debt management firm to agree a redress package since the FCA took over responsibility for regulating the sector on 1 April 2014.
Linda Woodall, director of mortgages and consumer lending at the FCA, said:
"Debt management customers are struggling financially and often in difficult situations so it's important that when people are putting their trust in a firm, they get the service they have paid for.
"When things go wrong we expect firms to put them right for their customers and we are pleased that Harrington Brooks is working with us to do this."
{desktop}{/desktop}{mobile}{/mobile}
In September 2014, Harrington Brooks advised the FCA that communications with some customers' creditors had been delayed, meaning customers may have been left with the impression that the firm had been in contact with creditors when it had not. The delay resulted in some people owing more in interest and charges than if the firm had contacted creditors sooner.
The FCA said customers were affected by the delays in two ways:
· Customers' creditors were not written to in a timely manner, meaning that interest and charges on their debts were frozen late;
· Customers were not written to in a timely manner following the outcome of the Harrington Brooks' negotiations with creditors on their behalf. This delay meant that customers were not notified that interest and charges on their debts had not been frozen.
Officials said Harrington Brooks has cooperated with the FCA's requests and will be writing to affected customers in the coming weeks.
Get FREE daily news summaries direct to your inbox. Sign up on the homepage now.
Follow us on Twitter and get frequent news alerts @FPM_online.
Or follow Editor Kevin O'Donnell - @FPM_Kevin or staff writer James Nadal - @FPM_James.
For the latest Sipp, SSAS and retirement news visit our sister news site www.sippsprofessional.co.uk and on Twitter @SippsPro.
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