Competent authorities and approved intermediaries


March 2010

Competent authorities and approved intermediaries

46.95 Competent Authorities and approved intermediaries – general

DROs involve a partnership between The Insolvency Service (through the official receiver) and the professional debt advice sector.

The division of responsibility is that approved intermediaries working for Competent Authorities will assist the debtor in making an  application for the DRO to The Insolvency Service via an online application form (see Part 2) (making all the necessary eligibility checks – see Part 1). The Insolvency Service is the agency responsible for assessing the application, granting the DRO and administering the effects.


46.96 Competent Authorities

A competent authority is a body designated by the Secretary of State as having the power to authorise intermediaries (see paragraph 46.103) [note 1].

A list of the currently authorised competent authorities is given at Annex A to this chapter.


46.97 Conditions to be met to be granted authorisation as a Competent Authority

To be granted authorisation as a competent authority, the organisation has to demonstrate through an application process (see paragraph 46.99) to the Secretary of State that it:

  • Provides or ensures the provision of debt management or debt counselling services through intermediaries [note 2].
  • Provides those intermediaries with education, training and development (including continuing education, training and development) in debt management or debt counselling services [note 3].

In addition, The Secretary of State must be satisfied that the body making the application is a fit a proper body to approve individuals to act as intermediaries (see paragraph 46.100).


46.98 Consideration of applications

The Secretary of State’s function (see paragraph 46.105) is carried out by The Service by a combination of OROS, Policy Section and IP Section.


46.99 Application for designation as a Competent Authority

The Regulations [note 4] set out the process by which the Competent Authority has to apply to the Secretary of State for authorisation.

Without going into detail here, the information that the organisation has to supply in the application covers the following areas:

  • Details of the organisation (for example, name, registration, constitution, occupation and activities).
  • Financial information (for example, balance sheet).
  • Details of the nature of the applicant’s connection with the provision of debt management or debt counselling services.
  • Details of proposed or existing education, training and development for intermediaries.
  • Description of the process they intend to implement for the appointment of intermediaries.


46.100 Fit and proper body

The Secretary of State cannot grant authorisation to a competent authority unless he/she is satisfied that the applicant is a fit and proper body.  The Secretary of State must consider the following when making this decision [note 5]:

  • If the body has committed any offence under the insolvency legislation.
  • If the body has engaged in any deceitful or oppressive or otherwise unfair or improper practices, whether unlawful or not.
  • If the body has failed to carry on its activities with integrity and skill. 
  • If the body has entered into a CVA.


46.101 Designation as a Competent Authority

If the Secretary of State is satisfied with the contents of the body’s application, he/she may grant authorisation for it to act as a Competent Authority.  The Secretary of State must, on making this decision, send a letter to the body advising them if they have unlimited designation, or limited designation (where it is only authorised to approve persons of a particular description as intermediaries) [note 6].


46.102 Withdrawal of authorisation

Where it appears to the Secretary of State that a body:

  • Is not or is no longer a fit and proper person to act as a competent authority;
  • Has failed to comply with any relevant provision under the legislation;
  • Has furnished the Secretary of State with false, inaccurate or misleading information,

The Secretary of State may withdraw an existing designation [note 7].


46.103 Approval of intermediaries

Once a body has received the appropriate designation, it may begin to appoint individuals as approved intermediaries.  The role of the approved intermediary is to guide the debtor through the DRO application process and to make the application on the debtor’s behalf.  An individual cannot act for the debtor in the DRO process without being an approved intermediary.

The intermediary must make an application for authorisation (see paragraph 46.106) to the Competent Authority, who must be satisfied that the individual is a fit and proper person to act as an approved intermediaries [note 8].


46.104 Approved intermediary must be an individual

An approved intermediary must be an individual (a natural legal person) and not any organisation.


46.105 Ineligibility for approval

The legislation [note 9] sets out grounds under which a individual will be automatically prevented from being approved as an intermediary.  These grounds include the following:

  • If the individual has been convicted of any offence involving fraud, dishonesty or violence, whose convictions are not spent.
  • If the individual has committed an offence under the insolvency legislation.
  • If the individual has engaged in deceitful, oppressive, unfair or improper practices.
  • If the individual has no experience, education or other training in the provision of debt management or debt counselling services.
  • If the individual is an undischarged bankrupt, has a BRO/BRU, is in DRO or has a DRRO/DRRU
  • If the individual is disqualified under the Company Directors Disqualification Act 1986.


46.106 Application process

Applications to a Competent Authority by an individual for approval to act as an intermediary must be in writing and contain, amongst other things, the following [note 10]:

  • A description of the individual’s current occupation or activities.
  • Reasons why the individual is considered suitable for approval.
  • Details of the individual’s qualifications.
  • Details of the individual’s experience in the provision of debt management or debt counselling services.


[Back to Part 5 – Effect of a DRO] [On to Part 7 - Restrictions imposed on debtors subject to a DRO, DRRO, IDRRO or DRRU]