Significant decision for Debt PurchasersPosted on 12/07/19
We have obtained an important ruling which will assist debt purchasers in debt recovery litigation. In MFS Portfolio Ltd v Phelan and West – HHJ Walden - Smith, on appeal, has upheld the decision by District Judge Chaudhuri  GCCR 16027 that a non FCA regulated debt purchaser can rely on the exemption in paragraph 55 of the Schedule to the Financial Services and Markets Act 2000 (Exemption) Order 2001 if it has entered into a servicing agreement with another member of the same group who does hold FCA permission.
Following detailed consideration, the court ruled that MFS Portfolio was an exempt person under the legislation and hence did not require the authorisation of the FCA in order to be a claimant in debt recovery proceedings. This decision will be of great relief to the debt purchase industry as the structure used by the claimant in this case is commonplace.