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Aipedia: Debt advice firms
AI can draft a confirmation of advice letter from a call transcript, but CONC 8.3.4R still requires a durable-medium record of the advantages, disadvantages, costs and risks. The letter is usually the firm's main evidence if advice is later challenged, so drafting errors carry lasting weight.
Part of: AI in Debt advice firms
In short
National Debtline's AI pilot, funded through the MaPS Transformation Fund, drafted over 500 confirmation of advice letters from call transcripts and CRM data; more than 45% were ready to send unchanged and a further 47% needed minimal edits, with mandatory human review. CONC 8.3.4R requires advice in a durable medium setting out advantages, disadvantages, costs and risks, with specific content for IVAs, protected trust deeds, insolvency and DMPs. An AI letter that drops a warning or states something the adviser never said can undermine the firm's defence. Keep a person accountable for every letter.
After a telephone or web chat session, debt advisers write to the customer confirming what was discussed and recommended. It is time-consuming work and a natural candidate for generative AI. The Money Advice Trust described its National Debtline pilot in June 2026: AI drafts a tailored confirmation of advice letter using the call transcript and CRM data, and an adviser reviews it before sending.
Across two pilots and more than 500 letters, over 45% of drafts were ready to send unchanged and a further 47% needed only minimal edits. Human review was mandatory throughout. The figures suggest the approach can work, and also that a meaningful share of drafts still need correction.
CONC 8.3.4R in CONC 8 requires the firm to give advice in a durable medium setting out the advantages, disadvantages, costs and risks of the recommended options. It includes specific content where relevant: the risks of an IVA or protected trust deed (8.3.4R(4)), the nature of insolvency procedures (8.3.4R(6)) and a warning about debt management plans (8.3.4R(3)(e)).
CONC 8.3.2R requires the advice itself to be suitable and to explain why other options are unsuitable. The letter must faithfully record that reasoning.
Records and the Consumer Duty. CONC 8.3.15G points to orderly records under SYSC 9.1.1R. The FCA's good-practice page asks for auditable records of AI use, and the consumer understanding outcome under PRIN 2A means letters should be clear to the customer who receives them.
Illustrative scenario: an adviser explains on a call that a debt relief order is suitable and why an IVA is not. The transcript mishears a creditor balance and the AI draft states the wrong total. It also omits the warning about the effect on the customer's credit file. The adviser, working through a queue, approves the letter. Months later the customer complains that they were never told about the consequences and the firm's own letter appears to support them.
Common faults include:
The safest framing is that the AI drafts and the adviser advises. The recommendation must come from the adviser's assessment on the call, not from whatever the model infers from the transcript. If a draft letter recommends something different from what was discussed, the reviewer should treat that as a warning sign about the tool, not a suggestion to adopt.
Firms that move further, letting AI choose the recommendation as well as describe it, take on the suitability questions covered in AI recommending IVAs, DROs and DMPs. Where the letter also goes to creditors or feeds a plan, errors spread further; see AI creditor offers.
A defective letter is not a claim in itself, but it can decide whether a later negligence claim is defensible. Where a customer suffers loss and sues, PI usually responds subject to the wording, the excess and any AI or technology terms. Because debt advice PI is voluntary, the wording is all that governs. If a review reveals a batch of faulty letters, notifying that as a circumstance may be required under your policy; see circumstance notification and what to document about AI use.
Apex arranges PI for debt advice firms and can review how your wording treats AI-drafted advice records. More on the AI in debt advice hub.
Yes, nothing in CONC 8 prevents it. The letter must still meet CONC 8.3.4R and accurately reflect suitable advice. National Debtline's pilot kept mandatory human review of every letter, which is a sensible benchmark.
CONC 8.3.4R requires the advice in a durable medium setting out advantages, disadvantages, costs and risks, plus specific content where relevant, such as IVA and protected trust deed risks, the nature of insolvency procedures and the DMP warning.
Both. An accurate letter is strong evidence the customer was properly advised. A letter with wrong figures or missing warnings can support the customer's case, which is why the reviewer's checks and approval should be recorded.
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