How to check a debt company is legitimate

To check a debt company is legitimate, look it up on the FCA’s Firm Checker or Financial Services Register, and if you are dealing with an insolvency practitioner, check their licence with the Insolvency Service or their professional body. Use the contact details on those registers, not the ones in an advert, email or text. Free, impartial debt advice is always available, so you never have to use a firm you are unsure about.

Who should be regulated, and by whom?

Different people in the debt world answer to different regulators. Knowing which one applies tells you where to check.

The FCA does not regulate everything. It says debt collection of unpaid council tax, water, gas or electricity bills is outside its remit, for example. Protected trust deeds are supervised by the Accountant in Bankruptcy (AiB), the Scottish agency that oversees debt solutions.

How do you use the FCA Register?

The FCA has two tools:

• The FCA Firm Checker tells you whether a firm is authorised and has permission for the service it is offering you. Use it before you deal with a firm.
• The Financial Services Register is the full public record. As well as a firm’s status and permissions, it shows its registered name and trading names, main place of business, complaint contact details, any appointed representatives, and its history, including past fines and disciplinary action.

When you search:

1. Search by name or firm reference number (FRN). Check that the FRN and contact details you have been given match the register exactly.
2. Check the status. Avoid a firm marked ‘No longer authorised’ or ‘Revoked’.
3. Check the permissions. A firm authorised for something else is not necessarily allowed to give debt advice.
4. Look for a principal firm. An appointed representative works under another firm, its principal, which is responsible for it. If you have concerns, the FCA says to check with the principal.
5. Use the register’s contact details. Fraudsters set up clone firms that copy the name of a genuine authorised firm. The FCA says to always contact a firm using the details on its own tools.

The FCA also keeps a Warning List of firms it has warned about. If a warning exists, it shows up when you search for the firm.

What about lead generators?

The FCA says many debt adverts on social media and search engines are placed by lead generators: firms that collect your information and pass it on to authorised advisers or insolvency practitioners. They may be paid for doing so, and may push you towards particular solutions. A lead generator should only take basic details about your debts and give factual information. It is not authorised to give you debt advice, and you should never be coached into giving certain answers, such as changing your income or spending figures so you appear to qualify for something.

A lead generator may not appear on the FCA Register at all. That makes it even more important to ask who it passes your details to, and then check that firm.

How do you check an insolvency practitioner’s licence?

A trust deed is set up by a licensed insolvency practitioner, who acts as your trustee. IPs in the UK are licensed by one of three recognised professional bodies: the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Chartered Accountants of Scotland (ICAS). To check:

• The Insolvency Service’s Find an insolvency practitioner search lets you search by name, company, town or postcode, and shows contact details and the IP’s authorising body. It only includes IPs who have agreed to be listed, so it is not a complete list.
• The IPA’s directory lists IPs it licenses, although members can opt out.
• The ICAS Find a CA search has a filter for members who hold an insolvency permit issued by ICAS.

If you cannot find someone, ask the firm which body licenses its IPs and check directly with that body. The person who phones you may not be the IP themselves, so ask for the name of the IP who would act for you.

A genuine IP must explain all your debt options, not just a trust deed, and set out the likely costs. By law, before you sign a trust deed you must be given a Debt Advice and Information Package and a trust deed information document, with adequate time to consider them, which guidance says is at least 3 calendar days. Our guide to what to check before you sign a trust deed has a full list of questions to ask.

What are the warning signs?

The Advertising Standards Authority (ASA), the UK’s advertising regulator, and the FCA have both warned about misleading debt adverts. Be cautious if a firm:

• claims to be ‘government approved’ or calls a trust deed or IVA a government scheme
• uses a name or web address that sounds like a debt charity or a free advice service
• promises you can write off a set percentage of your debts; the ASA says such claims need hard evidence from the firm’s own customers, and what happens to your debts depends on your circumstances
• calls its help ‘free’ without saying fees apply; the FCA says fees for a trust deed or IVA often come to several thousand pounds
• uses a quiz, or says it can tell you in seconds whether you qualify
• offers only one solution, or tries to put you off other options
• pressures you to decide or sign quickly; a genuine business will not mind waiting while you think
• contacts you out of the blue by phone, text, email or social media message
• coaches you to give particular answers about your income or spending
• will not tell you who it is, who it passes your details to or how it is paid
• asks for an upfront fee to set up a Debt Arrangement Scheme

Is this website a debt company?

We think you should ask us the same questions. Here are the plain answers.

• We are an information and enquiry service. We do not give debt advice, and we do not recommend any solution, including a trust deed.
• We pass your details on only if you ask us to. They go to a firm of licensed insolvency practitioners, who will contact you to go through your options.
• We may be paid. The firm we pass your details to may pay us a fee for the introduction. This does not change what you pay.
• The arrangement is disclosed. If you go ahead with a trust deed, the professional rules for IPs in Scotland (SIP 3.3) say the trustee must tell your creditors who referred you and the amount of any payment to the referrer.
• You can check the firm. Ask for the firm’s name and the IP’s licensing body, and check them as described above.

You are free to go to a free advice service instead of us, or as well as us. How our service works sets out each step, and free debt advice in Scotland lists services with phone numbers.

How do you report a firm?

• An unauthorised firm or a suspected scam: call the FCA on 0800 111 6768, or use its online contact form.
• If you have lost money or shared bank details: tell your bank straight away. In Scotland, report fraud to Police Scotland on 101, or contact Advice Direct Scotland on 0808 164 6000.
• A misleading advert: report it to the Advertising Standards Authority.
• An insolvency practitioner: complain to the IP first. If you are not satisfied with the response, GOV.UK has an online form to complain to their professional body.
• An authorised firm that has treated you unfairly: complain to the firm first. If you get no final response within 8 weeks, or you are unhappy with it, you can go to the Financial Ombudsman Service.
• This website: see our complaints page.

Official sources

• FCA: unauthorised or unsuitable debt advice
• FCA: how to check a firm or individual is authorised
• GOV.UK: find an insolvency practitioner
• ASA: Enforcement Notice on debt management (IVA and PTD) adverts
• FCA: report a scam or unauthorised firm