Notes for Guidance - Payments distributor - Debt Arrangement Scheme

Applications must be made in writing to the DAS Administrator and you must satisfy the following:

• hold a current licence under the Consumer Credit Act 1974
• be registered under the Data Protection Act 2018 as a data processor
• make and maintain arrangements to ensure financial security of sums received from clients make
• maintain appropriate arrangements to accept and disburse payments
• make and maintain appropriate arrangements to ensure compliance with the Financial Services Authority Codes of Practice relative to debt management and collection guidance
• make and maintain appropriate arrangements for the issue of required reports
• provide an information technology system to transmit reports to clients, creditors, money advisers, DAS Administrator by the preferred medium (e.g. text and or data files)

The money adviser will nominate a payments distributor on an application.

Where the DAS Administrator consents to the nomination. You must carry out the functions and duties of a payments distributor.

Where the DAS Administrator does not consent to the nomination, for example due to a conflict of interest between the client and the payments distributor, the DAS Administrator must arrange for another payments distributor to act.

If you are or become a creditor in a DPP you should notify the DAS Administrator who will allocate another payments distributor.

You must inform the DAS Administrator as soon as you become aware of any changes in your organisation that may affect your approval as a payments distributor.

The DAS Administrator can revoke approval where:

• they are satisfied you are no longer a fit or proper person or body
• in their opinion you have failed without good cause to carry out a function under the Act or Regulations
• after two weeks from the date of written notice of that failure you continue to fail to carry out that function
• in their opinion you fail to comply without good reason with any condition to which the approval is subject under regulation 14(5)

The DAS Administrator will issue a letter giving at least 30 days notice.

Where approval is revoked a replacement payments distributor will be specified. 

The DAS Administrator will also specify the period within which the transfer must be completed, normally 30 days.

Where the transfer will impact a very large number of DPPs, the DAS Administrator may allow the transfer to be done in batches over a longer period.

You can choose at any time to cease to act as a payments distributor by giving the DAS Administrator at least 30 days notice.

The DAS Administrator will specify a replacement payments distributor. 

The DAS Administrator will also specify the period within which the transfer must be completed, normally 30 days.

Where the transfer will impact a very large number of DPPs, the DAS Administrator may allow the transfer to be done in batches over a longer period.

The DAS Administrator will update eDEN with the details of the replacement payments distributor and place a notice,  informing all parties of the impending transfer.

Whether you cease to act or your approval is revoked you should ensure all records on eDEN are up to date, including recording any missed payments on the case and updating the minor’s creditor banking and payment details.

Original payments distributor

You should send a detailed list of the following to the DAS Administrator and the replacement payments distributor:

• DAS reference number
• client’s details
• payment method
• amount 

Where you are holding any funds on behalf of a client these should be transferred to the replacement payments distributor.

You should write to the client explaining the transfer and advise they stop paying their regular payment until they receive a notice from the replacement payments distributor. 

If you do receive a payment from a client within five days of the notification you should forward it to the replacement payments distributor. 

If you receive a payment from the client after five days of the notification it should be returned with a reminder to send it to the replacement payments distributor.

Replacement payments distributor

You should contact the clients within five days of receipt of the list issuing revised paying instructions.

You should use the information on eDEN to contact the creditors to arrange distribution of the payments.

You can charge an administration fee as specified in the regulations. See section on fees applied to a DPP.