Companies throughout the UK, whether they are a recent start-up, SME or have been established for some time, will more than likely find themselves in the situation where a client hasn’t paid for their services or products. Whilst this is a very frustrating situation to be in, this is where a company like CPA (a professional debt collection agency) can help. CPA share insider knowledge on one of the most common questions businesses have about debt collection organisations: are they regulated by some sort of governing body? Denise Parkinson, CPA director, answers.
Who regulates debt collection agencies?
All debt collection agencies are legally required to be regulated by the Financial Conduct Authority (FCA), which CPA is. If you go on to the CPA website you will see the FCA badge at the footer of the website.
Who is the FCA?
Established back in April 2013, The FCA is the conduct regulator for 56,000 UK financial services firms and financial markets, including debt collection agencies.
FCA believes that financial markets should be effective, honest and fair, as this can ensure that consumers get a fair deal. Their aim is to make markets work effectively for both individuals and businesses. How do they do this? They do this by regulating the conduct of more than 50,000 companies across the UK.
How does the FCA work?
The FCA achieves the above by setting the following objectives:
Protecting consumers – we secure an appropriate degree of protection for consumers.
Protecting financial markets – we protect and enhance the integrity of the UK financial system.
Promoting competition – we promote effective competition in the interests of consumers.
How does a debt collection agency become regulated?
The FCA believes that any firm or individual offering financial services should always act in the best interest of their clients at all times, whilst also upholding the integrity of the financial services industry as a whole. They authorise and supervise both firms and individuals who offer financial services.
In addition to this, firms and individuals also have to be authorised or registered by the FCA and this is achieved through meeting their requirements.
How do these agencies meet FCA requirements?
Before even operating in the financial market, debt collection agencies have to meet a wide range of requirements. The FCA will review everything from business plans to budgets and resources to whether staff have the necessary qualifications and experience. Once they have enough evidence to support this, the FCA will then look into authorising or registering them.
Is CPA ‘FCA Approved'?
We are proud to be FCA Approved and we definitely wear our badge with pride! The FCA granted us Approved Person status, as they deemed us fit and proper to perform our services. This means that they considered and believed that as a firm we are honest, competent and capable, have good integrity, reputation and financial soundness.