Regulation Of Fee-Charging Debt Management Companies

EDM number 1948 in 2010-12, proposed by Nicholas Dakin on 20/06/2011.
Categorised under the topic of Financial services.

That this House notes that the Office of Fair Trading's recent debt management compliance review found that there is widespread non-compliance with its guidance by debt advice and debt management licensees with mis-leading advertising and poor competence among front-line advisors prevalent; further notes concerns raised by Citizens Advice that debt management companies frequently charge excessive fees for their services, charge fees without making it clear to the client what they can expect in return or fail to pass fees to creditors, as well as concerns raised in the recent Citizens Advice super-complaint to the Office of Fair Trading regarding widespread consumer detriment arising from aggressive marketing on behalf of fee-charging debt management companies including the widespread practice of cold calling, which provides a gateway to bad practice, particularly where vulnerable consumers are targeted; and calls on the Government to take urgent steps to introduce more effective regulation of the fee-charging debt management sector, including an immediate ban on cold calling, an immediate ban on the charging of upfront fees for debt management services from clients before an agreement has been reached with the client's creditors and the client has received confirmation regarding what this agreement entails, and effective auditing of for-profit debt management companies.

This motion has been signed by a total of 74 MPs.