FCA Director of Supervision (Retail and Authorisations), Jonathan Davidson, has written to debt management firms with interim permissions setting out FCA expectations for when these firms are buying or selling customer contracts or customer contact details. He points out that:
- transfers must be lawful and compliant with FCA rules and principles and with data protection legislation;
- in accordance with Principle 11, FCA would expect at least 10 days’ notice of any proposed sale or purchase of customer lists or contracts;
- in accordance with Principle 6, FCA expects firms to provide a statement to affected customers ahead of any transfer explaining, among other things, amounts paid and outstanding, and reminding the customer of the availability of the Money Advice Service, as well as seeking any consent needed for the transfer;
- firms must ensure that they are meeting their fiduciary duties in relation to client money when holding it as trustee; and
- purchasing firms are to have adequate financial resources, including the ability to comply with relevant prudential requirements. They must also ensure they enter into proper contracts with transferring customers and provide them with clear statements on their contractual options following transfer.