Debt management: fourteenth report of session 2010-12, report, together with formal minutes, oral and written evidenceThis report highlights four main areas of ongoing concern relating to debt management: regulation of consumer debt, payday loans, debt management companies and the Money Advice Service. It makes a number of recommendations for future Government action including reforms for higher licensing fees to be charged for higher-risk credit businesses, for a fast track procedure be put in place to suspend credit licenses, and for the new regulator be given the power to ban harmful products. The Financial Services Bill did little to clarify the way in which the consumer credit market is to be regulated. The Committee also wants be certain that the payday loan industry adheres to the highest standards - either through the codes of practice that are currently being developed or, failing that, by the new regulator. Regulations also need to be introduced to ensure that debt management companies publish the cost of their debt advice and their outcomes, if an agreement cannot be reached during discussions with the industry. Furthermore, effective auditing of debt management companies' client accounts needs to be established. The Money Advice Service needs to provide details of its business plan. Given that the legal aid budget for such services is being cut by 75% the Minister's assertion that there will be no diminution of face-to-face debt advice is confusing. The Money Advice Service will be up and running by April and yet its remit, and in particular its relationship with highly respected brands such as Citizens Advice, remains unclear |
Contents
Report Page | 3 |
Payday Loans | 12 |
Debt Advice | 27 |
the Money Advice Service | 35 |
Conclusions and recommendations | 41 |
Common terms and phrases
advertising Ann McKechin bank bankruptcy believe borrowing budget CCCS Chair charges Citizens Advice clients concerns Consumer Credit Act Credit Counselling credit licence credit market credit unions creditors customers Davey David Fisher debt management companies Debt Management Guidance debt management plan debt problems Debt Relief Orders debt solutions debtors DEMSA members DMCs Edward Davey ensure face-to-face fees financial difficulties financial education financial services firms free debt advice free-to-client funding Government Government's high cost credit home credit income Individual Voluntary Arrangements industry interest issues lending Martin Lewis Melanie Taylor mental health problems Money Advice Service Nadhim Zahawi OFT's organisations overdraft Paul Blomfield payday lenders payday loans payment Payplan personal insolvency Peter Crook regulatory repay repayment response Sarah Brooks short-term Tony Hobman trade unsecured debt Vivienne Dews