bank referral commissions from fee paying DMC's

[Amethyst]

I wrote the to OFT about the banks referring and receiving commission from fee paying DMCs such as Gregory Pennington.

Sent: Tue 25/08/2009 10:52
To: Enquiries
Subject: Enquiry ref referrals to fee paying Debt Management Companies.


Dear Sirs

I was wondering if you could advise me of the OFTs position / guidance with regard to banks debt management / money management departments referring customers to fee paying debt management companies as opposed to free services such as CCCS.

We are seeing a number of referrals from banks to fee paying debt management companies, where the debt management company offers the customer a discount as they were referred by the bank.

Additionally we have heard of banks informing customers they would not freeze interest on accounts unless they went through a specific fee paying debt management company.

This is a general enquiry on the applicable guidance at the moment.

Many thanks for your help

Kind regards

How in gods name is this a proper reply to my enquiry ?

Dear Mrs Coleman

THE CONSUMER CREDIT ACT 1974

Thank you for your email received on of 25 August 2009.

Under the Consumer Credit Act 1974 (“the Act”), if a business wishes to be involved in activities relating to consumer credit or hire, including debt collection, they must have a consumer credit licence. The Office of Fair Trading (the OFT) has duty to enforce the Act, including a duty to monitor the fitness of all traders that hold a consumer credit licence.

Unfortunately the OFT has no power to intervene in individual disputes, and therefore we are unable to assist you directly in this matter.

The Financial Ombudsman Service (FOS) can help with most complaints about consumer credit products and services if the consumer has failed to satisfactorily resolve the matter directly with the consumer credit licensee itself. FOS can be contacted at: Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR;; or www.financial-ombudsman.org.uk.

We have therefore noted the details of your enquiries, and we will consider this alongside any other complaints we have received with a view to any consumer credit licensing or other action we may decide to take. Unfortunately, we cannot disclose any details about any action we may take, due to legal restrictions on the OFT relating to disclosure of information.

Thank you again for writing to us and bringing this matter to our attention.

Yours sincerely


Olushola Egbowon
Enquiries and Reporting Centre
Office of Fair Trading

i doubt I need to tell you that I'm writing back.

[Amethyst]

Re: the OFT are pants

Replied - hope I got the sex right ....




Dear Ms Egbowen

With respect I do not feel the generic template response you have given me answers my enquiry at all.

As I stated in my letter ''This is a general enquiry on the applicable guidance at the moment.'' It is not a complaint, I do not mention a specific bank and I am enquiring as to the guidance the OFT offer in respect of these situations.

Plese could you answer my original enquiry and ''advise me of the OFTs position / guidance with regard to banks debt management / money management departments referring customers to fee paying debt management companies as opposed to free services such as CCCS'' or give me contact details of someone who will be able to assist me.

Many thanks

[LuggerBugs]

Re: the OFT are pants

You'll just end up in a black pit of despair. Sack the lot of 'em. Useless Twonks.

[Celestine]

Re: the OFT are pants

Jaysus! I get the impression that the OFT are totally out of their depth with regard to dealing with the banks. (I certainly got that impression during our meeting with them last year!!)
They must feel like they are herding ferrets! Every day the banks come up with yet another sneaky practise to increase their revenue streams and the OFT seem utterly incapable of reacting appropriately.

Perhaps the FSA (grr), the ombudsman and the BBA (GRRR) should also be written to??

[Amethyst]

Re: the OFT are pants

REPLYYYYYYYY

The OFT will be soon be commencing a compliance review into the Debt Management market.

The Consumer Credit Act 1974 (the Act)
Enquiry: Referrals to fee paying debt management companies

Thank you for your further email, further to our response of 4 September 2009.

I am sorry that our earlier response did not address the specific issues you have raised.

As you know, under the Consumer Credit Act 1974 (the Act), if a business wishes to be involved in activities relating to consumer credit or hire, including debt collection and debt management, they must have a consumer credit licence. The Office of Fair Trading (OFT) has duty to enforce the Act, including a duty to monitor the fitness of all traders that hold a consumer credit licence.

You may be interested to note that the OFT has issued guidance to consumer credit licence holders engaged in commercial debt management and also to those in the debt collection industry. The Debt Management Guidance is intended to ensure that debt management companies treat debtors fairly. The Debt Collection Guidance us intended to ensure that debt collectors treat individuals fairly. Non-compliance with the appropriate guidance will call into question the fitness of licence holders and applicants. You can view our guidance at:
www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/debt-management
www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/debt-collection

I have reviewed your query and I am unable to find anything specific in either the Debt Management Guidance or the Debt Collection Guidance which relates to the issue you have raised.

However, although there is no published guidance on this issue, that does not mean that the OFT would not be concerned with such practices. A thorough investigation would need to be conducted into the companies involved and the circumstances surrounding such referrals before we could comment specifically.

If you wish to submit a complaint about a company / companies engaging in activities which you feel should be of concern to the OFT this will be considered along with any other information the OFT holds about the company and we may or may not decide to conduct an investigation.

The OFT will be soon be commencing a compliance review into the Debt Management market. Having our attention drawn to issues such as that highlighted by yourself will inform our research in this area and we would therefore appreciate any further details you may be willing to supply.

I hope the above is helpful and thank you once again for taking the time to write to us about this matter.

Yours sincerely




Nilufar Miah
Enquiries and Reporting Centre
Office of Fair Trading

[EXC]

Re: the OFT are pants

That's better then?

[Amethyst]

Re: the OFT are pants

much - maybe i'll change the title

[enaid]

Re: bank referral commissions from fee paying DMC's

Replied - hope I got the sex right ....
Olushola Egbowon
Enquiries and Reporting Centre
Office of Fair Trading

And what sex do you think this one is ?
Nilufar Miah
Enquiries and Reporting Centre
Office of Fair Trading

[Amethyst]

Re: bank referral commissions from fee paying DMC's

Relevant part of banking code.

Writing to BSCB and fSa and halifax next