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Tougher Action Needed On Fee Charging Debt Management Companies Says CAB

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  • Tougher Action Needed On Fee Charging Debt Management Companies Says CAB

    Hi

    CAB press release - Tougher action needed.......

    http://www.citizensadvice.org.uk/press_20110915
    16 September 2011

    A substantial number of fee charging debt management companies are exploiting vulnerable consumers, says national charity Citizens Advice today as it calls on the regulator to impose tougher sanctions on companies flouting the rules.

    Citizens Advice Bureaux helped with over 3,000 problems relating to rogue debt management services and credit repair last year (2010-11). The charity reports fee charging debt management companies charging excessive fees, offering vulnerable people inappropriate debt solutions and forcing people further into debt.

    In its response to the Office of Fair Trading’s consultation on debt management and credit repair services guidance, Citizens Advice says it welcomes new, clearer tougher guidance from the OFT, but calls on the regulator to ensure it imposes tough sanctions on companies which break the rules.

    Citizens Advice Chief Executive Gillian Guy said:

    “People already struggling with their finances, trying to do the right thing and address their debt problems, should not be pushed over the brink by unaffordable fees or inappropriate services.

    “These guidelines from the OFT set high standards for the debt management and credit repair industry. However, guidelines alone are not enough. In the past debt management companies have routinely flouted the OFT's guidelines, so these will need robust enforcement. The regulator must not be afraid to impose tough sanctions where the guidelines are ignored and to revoke the credit licenses of repeat offenders.

    “As the Government reviews the future of consumer credit regulation, Ed Davey needs to make sure that consumers can count on a regulator with the right powers and political clout to deter bad practice and aggressively tackle firms, which treat customers unfairly.

    “Citizens Advice Bureaux and other independent debt advice charities provide free debt advice and are able to arrange debt management plans for free
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