FAQs About Starting a Debt Management Company

If you’re thinking of starting a debt management company, Logican can offer information, as well as providing the best software.

Starting a debt management company is not a simple task, but working to help those in debt can be a rewarding job. While the process can be lengthy due to new regulations by the Financial Conduct Authority (FCA), there is plenty of potential in pursuing this industry. With the number of personal insolvencies at its highest since 2012, the demand for qualified and efficient debt management companies is at its peak.

In 2014, the FCA took over regulation of all debt management companies and consumer credit. This was to make sure that every debt firm was working in the best interests of the consumer. After the new regulations came into force, many low-quality debt management companies went out of business. This means those that remain are experts in their field and focus on a client-centred approach.

To succeed in the debt management industry, you will need to follow the regulations set out by the FCA and adhere to all the procedures to work in the best interest of clients.

How to Start a Debt Management Company

Here, we have taken a selection of frequently asked questions when it comes to starting a debt management company.

How Do I Become FCA Authorised?

The FCA has guidelines in place and a process which every debt management company needs to go through to become authorised to practice debt management. The regulations vary from marketing guidelines to service charges and making sure companies tell clients about free debt advice services. Many previous debt companies did not comply with these regulations.

Which Services Can I Offer?

There are a number of different debt management solutions for clients. No individual is the same and, as such, a debt management plan (DMP) may work for one person, but an individual voluntary arrangement (IVA) might be better suited to another.

When the FCA talks about regulation of debt management companies, it refers to any company helping clients to deal with their debt, not just those handling DMPs. Most companies decide where to specialise their services. This can include focusing on either corporate or individual debt.

Do I Need Any Qualifications to Start a Debt Management Company?

Many people starting a debt management company have previous experience in the financial sector, many in the debt sector itself. Understanding the demands involved with organising the debts of others is important. As well as having the financial knowledge, being able to communicate effectively with those in debt is vital. Those in debt deal with feelings of anxiety and stress, so being sensitive to their situation is an important quality to have.

For further information about taking the right steps to starting a debt management company, refer to the Financial Authority checklist.

How LogiDebt Can Benefit Those Starting a Debt Management Company

Logican specialises in creating software for debt management companies and insolvency practitioners. This software streamlines everyday processes, making handling cases much easier for employees.

Efficient debt management software is essential for all debt firms. LogiDebt, Logican’s software for debt management companies, enables firms to evaluate their clients’ financial statements and offer the best debt solution for each individual. The software includes integrated access to the new Experian credit reports, which auto-populates and confirms the debt list. What’s more, it enables documentation to be uploaded easily and securely and integrates with online banking to automatically download clients’ bank statements.

LogiDebt automatically calculates and distributes payments received from clients to their relevant lenders. This software eases the communication process by using automated correspondence when required and also allows companies to manage incoming and outgoing repayments, which needs to be done accurately.

When dealing with multiple clients, being able to access information quickly is essential. Handling a debt management case requires access to a vast amount of information and communication with various creditors, as well as with the client. LogiDebt is the best solution for these businesses.

When starting a debt management company, choosing specialised debt management software can get you off to the right start. Contact Logican to discover how LogiDebt can help streamline your debt management business.