They have announced that they agree with the Minister that the Protocol should help drive up standards and improve consumer confidence in the run up to the launch of the Financial Conduct Authority, which will take over responsibility for consumer credit from the Office of Fair Trading.
Companies that sign up to the Protocol will be expected to provide clients with information about other appropriate debt management options including the availability of Debt Management Plans advice by providers accredited by the Money Advice Service. The information sheet is likely to be used by all debt solution intermediaries at the initial point of contact with a consumer in financial difficulty, where a Debt Management Plan may be an appropriate debt resolution to the client’s circumstances. It will assist a client in making an ‘informed choice’ before contractually committing to a solution.
The CAB Super-complaint investigated by the Office of Fair Trading in March 2011 found that there appeared no substantive evidence that compliant commercial Debt Management Companies charged any pre-contractual fees before a client entered a debt solution. The latest version of the DMP Protocol clarifies this further with increased emphasis on establishing sustainable and affordable debt solutions for consumers with limited risk of consumer detriment.
Consumers will be aware of all the debt solutions that they are eligible for and the costs of such solutions will be totally transparent to them. Consumer money will be protected in client accounts and acting in the consumer best interests will be the fore, as currently clarified in the OFT Debt Management Guidance published in March 2012, which remains the minimum standard of service delivery.
Consumer Affairs Minister Jo Swinson said:
“This is good news for consumers faced with debt problems. I am pleased to see commercial providers making these changes, which will see them help consumers by spreading the costs of the plan.”
Kevin Still, Director of the association, commented:
“APDSI’s key focus will be in ensuring that the consumer’s journey from initial point of contact with a licensed debt adviser to the ultimate product providers, whether this is a Debt Management Company of an Insolvency Practitioner, is fair and transparent with the consumer clearly aware of who they are dealing with and their role in the process.
“2013 presents a number of strategic challenges for businesses of all sizes in this sector and the DMP Protocol represents part of a joined up approach for members to embracing the regulatory changes outlined by the Minister and the emerging best practices.”
