Notes for Guidance - Payments distributor - Debt Arrangement Scheme

The legislation allows for fees to be charged to cover the administrative costs associated with the DPP. The client does not pay any fees for the administration, these are borne by the creditors.

These fees will only be applied when the client has paid their regular payment and deducted prior to any money being paid to the creditors.

The fees charged are dependent on the date of approval of the DPP.

DPPs approved prior to 1 July 2011

The maximum administration fee payable is 10% of the sum due and is fixed for the term of the DPP, unless you cease to act or choose to reduce your fee. You cannot increase the fee payable.

You must not make any additional charge of any kind to the client for payments distribution. However, where a client has a fee charging money adviser, the client may pay an additional fee direct to that money adviser to cover the continuing service provided.

DPPs approved between 1 July 2011 and 3 November 2019

There is a fee of 2% of the sum due to creditors for the consideration of an application for approval of a DPP, which is paid to the DAS Administrator. 

The maximum payment distributor administration fee payable is 8% of the sum due and is fixed for the term of the DPP, unless you cease to act or choose to reduce your fee. You cannot increase the fee payable.

You must not make any additional charge of any kind to the client for payments distribution. However, where a client has a fee charging money adviser, the client may pay an additional fee direct to that money adviser to cover the continuing service provided.

DPPs approved after 4 November 2019

There is a fee of 2% of the sum due to creditors for the consideration of an application for approval of a DPP, which is paid to the DAS Administrator. 

There is an administration fee of 20% of the sum due to a creditor which is paid to you in the case of a DPP for an individual.

There is an administration fee of 8% of the sum due to a creditor which is paid to you in the case of a DPP for a legal person, trust or unincorporated body of persons. You must not make any additional charge of any kind to the client for payments distribution. 

DPPs where there is a replacement payments distributor

If you were approved as a payment distributor and the transferred DPP was approved before 1 July 2011, you can apply a fee equal to the rate charged as per the section above, even if that rate is more than was charged by the transferring payments distributor. You can choose to charge a lower rate, however, you cannot charge a greater rate.

If you were not approved prior to 1 July 2011, you must charge the contract rate on all the transferred DPPs even if it was approved prior to 1 July 2011.

For all transferred DPPs that were approved on or after 1 July 2011 you must deduct the 2% administration fee and can only charge the agreed contract rate for the administration of the DPP.