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In The Spotlight
- Family debt advice business scoops Franchisee of the Year award
- Dundee-based brokerage wins Business of the Year award for debt solutions
- One advisor, two debt management referrals and over £600 commission
- Former mortgage packager tells of transition to award winning debt advisor
- EuroDebt and mortgageforce partnership goes from strength to strength
Debt management firms respond to Ministry of Justice decision
Tuesday 16th March 2010According to press reports, The Ministry of Justice (MoJ) has asked for more time to consider the findings of its consultation into debt management plans (DMPs).
It is expected to say that the responses to its consultation are still being considered, and it will refrain from announcing immediate legislative action.
The Office of Fair Trading (OFT) is also currently reviewing the Debt Management Guidance, following its Compliance review of licence holders.
Vance Parsons, director of debt solution provider EuroDebt, has said that it is important that the industry is able to give the public confidence in the services offered by reputable debt solution companies, adding: “The fact that the option of maintaining the status quo has been widely rejected by those consulted is encouraging.”
He went on to say: “There needs to be an outcome that accommodates both the ‘not for profit’ and ‘for profit’ sectors, which includes a full range of debt solutions including Individual Voluntary Arrangements (IVAs), as well as Debt Management Plans.
“The consultation also needs to take account of other activities of licensed debt solution providers, so there are no conflicts of interest – for example providing Claims Management services as well as Debt Management services.
“As a provider of Debt Management Plans, as well as a range of other debt solutions, we are having to consider the potential outcome of these consultations and reviews, but are confident that our business model can readily adapt.”
Kevin Still, director of Atlantic Financial Management, added: “There are some definite advantages to the proposed Option 3 with regard to regulated Debt Management Plans (DMPs) including a level of debt write off within a realistic timeframe and the freezing of interest & charges by creditors based upon the use of the Common Financial Statement.
“Our response to the consultation was more of a hybrid between Option 2 (an equivalent of the IVA Protocol) and Option 3 (regulated Debt Management Schemes), as we think there are advantages to the OFT regulating the schemes, but with principles transparency and affordability being the key to any fees charged.
“We also feel strongly that there should be better sharing of information and that creditors should be required to properly report DMPs on an individuals credit file based upon whether the repayment offer is deemed ‘reasonable’ or ‘token’, as defined by the Information Commissioner’s Office (ICO) in August 2007. This remains a real problem area, despite the fact that the credit reference agencies having the necessary status codes on their information sharing schemes, like CAIS (Experian), INSIGHT (Equifax) and SHARE (Callcredit).
“As a Debt Management Company we feel well equipped to adapt to positive changes that help indebted consumers in financial hardship deal with unmanageable debts – which is what this is all about.”
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