The Financial Conduct Authority (FCA) has secured restrictions on Ethica Resolve Limited following demands for repayment of loans, or purported loans, provided through disguised remuneration schemes. Affected consumers do not need to pay at this stage while regulatory and legal issues are resolved, but whether the debts can be enforced remains undecided. Ethica, an FCA authorised debt servicing and collection firm, acts for West 28th Street Limited, which bought the loans from a third party and is not authorised or regulated by the FCA. The schemes paid people, often contractors, consultants and agency workers, through loans rather than salaries. Some affected consumers dispute liability for the amounts claimed and challenge whether the debts are legally enforceable. Ethica will write to affected consumers explaining that they have no enforceable obligation to pay at this stage. It will make no further payment demands in the current proposed court claim while the regulatory and legal issues are resolved. Ethica and West 28 will not seek default judgments against people who have not responded to a legal claim. Additional protections are being put in place for vulnerable consumers, whom Ethica will identify. Consumers should not ignore formal court documents and should consider independent legal or debt advice before deciding how to respond.
UK FCA secures restrictions on Ethica over disguised remuneration loan repayment demands
The Financial Conduct Authority has secured restrictions requiring Ethica Resolve Limited to halt repayment demands in the current proposed court claim over disguised remuneration loans and notify affected consumers that they need not pay at this stage. Ethica and creditor West 28th Street Limited will also refrain from seeking default judgments against people who have not responded to a legal claim. The debts’ enforceability remains unresolved, and consumers should not ignore formal court documents.