UK watchdog proposes banning referral fees for debt advice firms

Consumer finances are coming under heavy strain during a cost of living crisis hitting Britain, piling pressure on banks and others to rearrange loan repayment schedules.

Consumers who enter into "unsuitable" arrangements to repay a debt can face dire consequences by having to pay far more money back over a longer period, the Financial Conduct Authority said.

It has estimated that around 52,000 of the 1.7 million people who seek debt advice every year begin with a debt packager, a figure which has likely increased due to the cost of living crisis.

Debt packagers are regulated providers of debt advice, who refer indebted customers to debt solution providers - in return for a referral fee - which make formal arrangements to repay debt.

Read more at Reuters