Yesterday the OFT published its revised debt management guidelines, as part of its ongoing effort to increase transparency and ensure that those seeking advice receive the best and most appropriate service possible.
The guidance update follows a review of compliance in the sector which found, amongst other things, widespread problems with misleading advertising and the quality of advice given in the fee charging sector. Together with targeted OFT enforcement, the revised guidance is designed to address the issues identified by the review.The Association of Professional Debt Solutions Intermediaries (APDSI) has welcomed the guidance, as it makes clear the responsibilities of debt management companies to apply due diligence in business dealings both with intermediaries and directly with clients. “We believe the proposals can only be good for consumers and good for the industry” said Alasdair Warwood, Secretary General of APDSI.He continued: “APDSI, as the representative body for those wishing to introduce their clients to professional and responsible debt solution providers, is keen to see the development of a market which meets the OFT’s objectives. Namely, introducers and brokers should be fully transparent about the service on offer and fees charged; explain to consumers both the risks and benefits of each proposed solution; not use misleading names or advertising, including misleading web-based adverts, and they should ensure that the advice provided is in customers' best interests.“We do however have one or two concerns about areas where we believe the guidance could be stronger and we shall be raising these with the OFT over the course of the consultation.”Among the concerns felt by the APDSI was the fact that the new guidelines do little to limit the scope for ‘hybrids’, which may lead to a conflict of interest when an introducer or broker is offering both debt management and claims management or when offering debt management and full and final settlements. APDSI is also worried that the Revised Guidance still allows for holding back client monies to provide full and final settlements, which can only worsen a client’s credit record. Plus, there is no requirement for independent audit to ensure that client monies are held in a ring-fenced account not accessible to the debt management company - although this is already a condition of DEMSA (Debt Management Services Association) membership. The Association expressed their feelings that “given the spate of collapses over the last year”, more guidance over the handling of client’s money should be a “vital consumer protection measure”.Alasdair Warwood concluded: “These latest OFT actions clearly signal the increase in regulation for the protection of consumers facing severe financial difficulties which has to be a good thing. There is a clear desire from the reputable companies in the market to be able to offer consumers the best possible advice and support and APDSI will help intermediaries achieve this, whilst continuing to be able to operate profitably.”Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010
Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010
Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010
Barclays lifts lid on banking write-offs
Wednesday 20th February 2008
Send To Friend Print
RSS Feed News Archive If you have any queries about this news story or our news section, please contact us
Posted in: 
0 comments:
Post a Comment