Aipedia: Debt advice firms

AI creditor offers and payment proposals

Aipedia, by the Apex broking team · Last reviewed 2026-10-30

AI can calculate pro-rata offers and draft letters to lenders, but CONC 8.5.3G still expects offers to be realistic, sustainable and in the customer's best interests. A wrong figure or a missed notice can lead to default charges, collection action and complaints.

Part of: AI in Debt advice firms

In short

Once a budget is agreed, debt firms send creditors a financial statement and a repayment offer, usually split pro rata. AI and automation now calculate offers and draft or send the communications. CONC 8.5.3G expects offers to be realistic and sustainable over the whole proposal, allowing for essential costs and priority obligations. CONC 8.2.5R requires transparent communications with lenders, and CONC 8.2.6R requires lenders to be told promptly if payments will be held. Errors in the maths, the creditor list or the timing can leave a customer worse off than before.

How AI is used for offers and creditor communications

Creditor work is repetitive and rule-based, which makes it a target for automation. Firms use tools to:

calculate pro-rata distributions of the available surplus across non-priority debts;
draft offer letters and financial statements for each lender;
send communications in bulk through portals or email;
read lender replies and decide what to do next.

Generative AI adds the ability to read free-text replies and draft responses. That is where judgement creeps in: deciding whether a counter-offer is acceptable or whether to escalate a refusal is advice, not administration.

The duties that apply

Sustainable offers. CONC 8.5.3G says offers to lenders should be realistic, sustainable and in the customer's best interests. A sustainable offer lets the customer make full repayments when due from disposable income over the whole proposal, after allowing for obligations such as taxes, fines, child support and debts that could lead to loss of the home or essential services.

Transparency and payment holds. CONC 8.2.5R requires a firm's communications to lenders on the customer's behalf to be transparent. CONC 8.2.6R requires the firm, if payments will be paused or retained, to tell the customer's lenders as soon as possible after the customer enters the debt solution, including why and for how long.

Changing payments. CONC 8.6 governs advice to stop or reduce contractual payments: it must be in the customer's best interests, the customer must be told to notify lenders and warned of the consequences of missed or reduced payments (CONC 8.6.1R and 8.6.2R).

What can go wrong

Illustrative scenario: an automated process calculates offers from a budget that has not been checked and leaves out a creditor added late to the file. The tool also sends standard letters that do not mention a payment hold. Lenders who were not told continue to apply charges and pass the account to collection. The customer complains that the firm's process made their position worse.

Other common failure points include:

offers built on an unchecked or out-of-date budget;
creditors missed, duplicated or given the wrong share;
payment-hold notices not sent or sent late;
automated replies accepting terms that are not in the customer's interests;
communications that are inaccurate about the customer's circumstances.

Because creditor work runs in bulk, a single configuration error can affect every case processed in a period. The harm to each customer may be modest, such as extra interest or a missed reduction, but the total can be significant and may need a structured remediation exercise rather than case-by-case fixes.

How PI usually responds

Where a customer suffers financial loss, such as avoidable charges or enforcement costs, because of a negligent error in offers or communications, PI usually responds to a resulting claim subject to the wording and excess. Some losses are small and may fall within the excess. Where client money is involved, losses from misdirected payments raise separate questions that PI may treat differently; see AI in debt management plan administration. Debt advice PI is voluntary, so check your wording; see does PI cover AI errors.

Practical controls

Generate offers only from an adviser-checked budget; see AI income and expenditure budgets.
Reconcile the creditor list against credit file data and the customer's papers before sending.
Build CONC 8.2.6R payment-hold notices into the workflow with a deadline and an alert.
Route all counter-offers, refusals and free-text replies to a person.
Keep copies of what was sent, to whom and when.
Check priority debts are handled separately; see AI advice on priority debts.

How Apex helps

Apex arranges PI for debt advice firms and can explain how your policy treats small, frequent losses against larger claims. See the AI in debt advice hub.

Sources

Frequently asked

What makes an offer sustainable under CONC 8.5.3G?

The customer should be able to make full repayments when due from disposable income across the whole proposal, after essential spending and obligations such as taxes, fines, child support and priority debts. An automated offer from an inflated surplus would not meet that standard.

What must we tell lenders if payments are held?

CONC 8.2.6R requires the firm, as soon as possible after the customer enters the debt solution, to notify lenders if payments will be paused or retained, with the reason and how long. Automate the reminder, but check notices actually go out.

Are pro-rata calculations regulated advice?

The calculation itself is administrative, but the offer rests on advice about what the customer can afford and which debts to prioritise. If the underlying budget or the treatment of priority debts is wrong, the offer can breach CONC 8.5.3G even when the arithmetic is right.

Can AI decide whether to accept a creditor counter-offer?

That decision involves judgement about the customer's best interests, so it is safer for an adviser to make it. Use AI to read and summarise replies, then route anything other than a straightforward acceptance to a person.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.