This site uses cookies; by continuing to use our site you agree to our use of cookies. More details in our privacy policy. Close



MAT continues feud with fee chargers 17 May 2011

Joanna Elson OBE told delegates assembled at the Credit Summit, run by Insolvency Today's sister title Credit Today, that more consumers were seeking free debt advice because their experiences with paid-for debt advice firms had left them in a weaker financial position.

She said: "There is misleading advertising and poor advice from commercial debt management firms, after that what does a company have going for it?

"They move to where the money is, and when government is looking at all the people who need money advice what you cannot do is say the private sector can look after this, as currently it is not fit for purpose."

Elson’s comments came after an Office of Fair Trading (OFT) review of the commercial debt management sector, conducted at the end of 2010, criticised 129 firms for inadequate compliance practices.

Since the conclusion of its review the OFT has revoked the consumer credit licences of four commercial debt management firms for providing misleading advice, and has shut down a number of "lead generator" websites used to market the services of paid-for debt management.

After Elson made her comments the debate turned to financial awareness of consumers, and the panellists unanimously agreed that more financial education should be written into the school curriculum to help consumers avoid unsustainable debt problems at a later stage.

Claire Sandbrook, chief executive of high court enforcement firm Shergroup, added that the onus should be on politicians to better inform the electorate of their debt obligations.

She said: "There is a failure by politicians to get up and tell the public what will happen if they fail to pay their debts.

"Banks have no credibility with the public, it is the politicians that need to say it so that it is not a shock when bailiffs show up at the door. There is so much work to be done in this area."



blog comments powered by Disqus