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R3 welcomes debt management inquiry 20 October 2011

The decision to hold an inquiry into the future regulation of debt management comes as the industry has struggled to shake off allegations of bad practice.

Frances Coulson, president of R3 (pictured), said debt management plans have been under-regulated for far too long.

She explained: “We believe they have a place in the range of statutory debt solutions – we simply would like them to be regulated as IVAs and bankruptcy are.

“We still see bad practice - a third of individuals in a DMP say that other options for dealing with their debts were not discussed with them and 10% in a fee charging DMP say they weren’t told they’d be paying a fee until their DMP had already started.”

Coulson added that debt advice can seem confusing and many DMPs do not work out - meaning the debtor ends up in bankruptcy or an IVA anyway, having suffered unnecessarily.

She said: “DMP providers should be subject to the same high standards of regulation, monitoring and professionalism as licensed professionals.

"We’ve not yet seen enough action from the Government in this important area, and this is a good start.”

 

Related links:

- Commons Select Committee - Debt Management Inquiry

 

 

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