Consumer watchdogs are putting the bite on debt management firms accused of failing
customers who are struggling to manage their money.
The OFT (Office of Fair Trading) is taking licensing action against 15 firms and another 35
have surrendered their consumer credit licences as investigators crack down on firms.
The OFT has told another eight firms they will lose their licences while another 86 debt
management advisers are under investigation.
Debt management guidance taking in to account of new and emerging unfair business
practices identified in the course of the inquiry.
Ray Watson, Director of the OFT’s Consumer Credit Group, said: ‘We are determined to
improve standards in this sector, as the failings identified by our review are unacceptable.
Companies providing debt management services should be in no doubt that we will act
against bad practice and ensure consumers are protected.’
Banks also want a better deal for customers struggling with financial problems.
Banks offer a fairer deal to borrowers
The British Bankers Association (BBA), that speaks for the major high street banks, has
revealed new proposals for a fairer and better way to handle debt for borrowers.
The banks are suggesting:
• A single debt management body to regulate firms that give advice
Streamlining advice from counsellors focused on early intervention and resolution
• Better identification of customers facing debt issues
• A dedicated online portal offering financial advice and a single place to go for
information
•
BBA policy director Paul Ross said: “Our vision is to provide a clear and coherent process to
help people facing debt difficulties, to intervene early where possible and to provide a simple
debt resolution solution if those early attempts do not succeed. We want to unravel the red
tape to bring about a more financially responsible solution for customers.
“Customers are currently faced with too many confusing options for resolving their debt, and
may set out too early on expensive legal procedures when a more common sense approach
would be better for everyone.”
