FCA warns of debt advice red flags as firms push fee-paying plans

What the FCA is warning about

Source: FCA press release, 22 September 2026.

The Financial Conduct Authority has urged people seeking debt advice to watch out for 4 red flags. The warning, published on 22 September 2026, follows concern that some consumers are being steered towards fee-paying debt solutions that may not be suitable for them. The FCA says this can happen through high pressure sales tactics, misleading information, or firms without the appropriate permissions. Free debt advice is available to everyone, and the regulator wants consumers to know the warning signs before they agree to anything.

The concern is not that fee-charging debt solutions are always wrong. The concern is the route some consumers take to reach them. The FCA says people can be pushed towards a solution that benefits the firm rather than the person in debt. Alison Walters, FCA director of consumer finance, said anyone struggling with debt deserves advice that puts their interests first, and no one should be pressured or misled into paying for a debt solution that may not be right for them. The 4 red flags are designed to help consumers spot that pressure or misleading conduct early, before they sign up or start paying.

The 4 red flags

The 4 red flags are set out plainly by the FCA. The first is pressure tactics: feeling hassled or repeatedly contacted, particularly after an online enquiry or an unexpected call, and being pressured to agree a solution quickly by phone or WhatsApp. The second is changing details: being asked or encouraged to change income or outgoings on an application or assessment form, or being coached to say certain things. The third is hidden alternatives: being steered to a fee-charging solution such as an Individual Voluntary Arrangement (IVA) or some debt management plans without alternatives properly explained or offered first. The fourth is unclear identity: the person contacting the consumer does not explain who they work for, or their details do not match the firm's official details.

Each flag points to a different part of the advice process. Pressure tactics concern how contact is made and how quickly a decision is pushed. Changing details concern the accuracy of the information used to assess a solution. Hidden alternatives concern whether free or cheaper routes were put on the table before a fee-charging plan. Unclear identity concerns whether the person and firm can be checked and verified. The FCA says free debt advice is available to everyone, so a consumer who sees any of the 4 red flags can pause and check the position before committing to a fee-charging solution.

Recent FCA action

The warning follows recent enforcement action. The FCA recently took action against Curtis Faraday after identifying serious concerns, including leading customers to give answers that made them appear to qualify for a fee-charging IVA. The firm is stopped from providing debt advice to new customers. Separately, the FCA has banned Howard Duckett, a senior manager at Beauforce Corporation Limited, for a lack of honesty and integrity. The FCA urges consumers with a Beauforce debt management plan to stop payments and seek alternative support.

The two cases show the kinds of conduct the 4 red flags are meant to catch. In the Curtis Faraday case, the FCA says customers were led to give answers that made them appear to qualify for a fee-charging IVA. In the Beauforce case, the FCA has banned a senior manager for a lack of honesty and integrity, and has told consumers with a Beauforce debt management plan to stop payments and seek alternative support. The FCA says free debt advice is available to everyone, and consumers who have been approached in the ways described in the 4 red flags can check the position and seek free help.

What to do if approached

The FCA has set out steps for consumers. Use the MoneyHelper debt advice locator for free impartial advice. Use the FCA Firm Checker to confirm a firm is authorised and its contact details match. Contact the FCA if you received poor advice. Complain to the firm, then the Financial Ombudsman Service if dissatisfied. These steps sit alongside the 4 red flags: the flags help a consumer spot a problem, and the steps help a consumer check a firm and raise a concern.

The FCA says free debt advice is available to everyone, so there is no need to pay for an initial check on options. The MoneyHelper debt advice locator is the route the FCA points to for free impartial advice. The FCA Firm Checker allows a consumer to confirm a firm is authorised and that its contact details match those given by the person making contact. If a consumer received poor advice, the FCA can be contacted. If a consumer is dissatisfied after complaining to the firm, the next step is the Financial Ombudsman Service. The FCA says no one should be pressured or misled into paying for a debt solution that may not be right for them.

Source: FCA: Debt advice warning, spot the red flags.

Related coverage on Kael Tripton: Before You Use a Debt Management Plan: Free vs Fee-Charging Firms, UK Debt Management Plan (DMP) Explained, IVA Explained: What an Individual Voluntary Arrangement Actually Means, Mortgage After IVA UK 2026: Getting a Mortgage Following an Individual Voluntary Arrangement, Before You Declare Bankruptcy: What You Lose and What Is Protected.

Frequently asked questions

How many red flags has the FCA set out for people seeking debt advice?

The FCA has set out 4 red flags. They cover pressure tactics, being asked or encouraged to change income or outgoings figures or being coached on answers, fee-free alternatives not being properly explained before an IVA or fee-charging plan, and the person contacting the consumer not explaining who they work for or their details not matching the firm's official details.

What did the FCA say about pressure tactics?

The FCA describes pressure tactics as feeling hassled or repeatedly contacted, particularly after an online enquiry or an unexpected call, and being pressured to agree a solution quickly by phone or WhatsApp.

What recent enforcement action has the FCA taken?

The FCA recently took action against Curtis Faraday after identifying serious concerns, including leading customers to give answers that made them appear to qualify for a fee-charging IVA. The firm is stopped from providing debt advice to new customers. The FCA has also banned Howard Duckett, a senior manager at Beauforce Corporation Limited, for a lack of honesty and integrity, and urges consumers with a Beauforce debt management plan to stop payments and seek alternative support.

What steps does the FCA suggest for consumers?

The FCA says consumers can use the MoneyHelper debt advice locator for free impartial advice, use the FCA Firm Checker to confirm a firm is authorised and its contact details match, contact the FCA if they received poor advice, and complain to the firm then the Financial Ombudsman Service if dissatisfied.

Is free debt advice available?

Yes. The FCA says free debt advice is available to everyone, and points consumers to the MoneyHelper debt advice locator for free impartial advice.