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FSA Debt Collector Criticised by Commissioner

The Complaints Commissioner has upheld an IFA firm’s complaint over the “hectoring” phone manner of a debt collection agency employed by the FSA.

At the end of July, Commissioner Sir Anthony Holland wrote to an unnamed IFA firm, which had penned a protest letter against not only the fines imposed for its failure to pay the balance of its fees, but also the way in which the money was chased up by the FSA’s debt collectors.

However, while the Commisioner replied that the FSA was within its rights to claim the full amount of fees from the firm, as laid out in the Fees Handbook (paragraph 4.2.9), he was concerned to hear that the firm received rough handling by the debt recovery agent.

During a phone conversation with ‘Ms A’ at the debt recovery agency, referred to as ‘Y’ in the Commissioner’s letter, the IFA firm was subjected to a “somewhat hectoring approach with continual interruptions, which I consider does not reflect well on the FSA”.

The Commissioner said: “The call lasted just more than 10 minutes and in my view, was badly handled by the company concerned who, in this case, represents the FSA. While it did not represent harassment it was certainly a conversation that the company should not have allowed to develop in the way it did.”

The IFA firm had said it was unhappy that it had been asked to pay the balance of its fees for the 2009/2010 accounting year as it had already informed the FSA that it had closed to new business on 19 August.

Its reason for closing to new business was that a provider had suddenly stopped its renewal commission payments.

The IFA firm claimed it should have been charged a pro-rata calculation, from 1 April to 18 August.

Following a consultation with the Commissioner, the FSA has agreed to allow the IFA to repay the balance of the fees in affordable instalments, based on the IFA’s proof of limited income.