DRF have welcomes the Business Innovation and Skills Select Committee’s report on Debt Management which focuses on the regulation of consumer debt.


The trade association, training and monitoring body for fee-charging debt resolution companies, Debt Resolution Forum (DRF), today cautiously welcomed the House of Commons’ Business Innovation and Skills Select Committee report on Debt Management.

The report focuses on the regulation of consumer debt, payday loans, the role of the Money Advice Service and Debt Management Companies.

Commenting on the report’s conclusions regarding debt management companies, chair of DRF and CEO of debt resolution company, ClearDebt, David Mond said:

“This report is published at a time of great change in debt resolution, with new guidance from the OFT expected shortly, with changes in funding and access to debt advice being put forward by the Money Advice Service and with the possibility of the development of a protocol compliant or regulated debt management plan being put forward by the Insolvency Service.

“Little of this has been taken fully into account by the committee’s report.

“However, the DRF welcomes a number of the committee’s recommendations, including powers for regulators to ban harmful products and a fast track procedure to suspend credit licences. The DRF believes the latter would be best achieved by properly resourcing the OFT and its successor, the Financial Conduct Authority (FCA), rather than introducing a fast-track procedure that could lead to compliant businesses having licences suspended without due process, something that would almost certainly force a viable business into insolvency.

“DRF supports full transparency regarding debt management companies’ fees, something that has been achieved by the members of trade associations like DRF. We do not however support the phasing out up-front fees, which effectively remunerates companies for the high proportion of the work that is done at the beginning of any debt management plan in setting them up.

“The DRF wholeheartedly welcomes the committee’s recommendation that there should be an effective audit of debt resolution companies’ client accounts. Industry practice in this area is not consistent and could lead to real consumer harm in the event of a company’s insolvency. The DRF will be putting forward standards to address this”.

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The Debt Resolution Forum is a trade association, training, monitoring and complaints body for fee-charging debt resolution companies who offer a range of solutions including debt management plans, Individual Voluntary Arrangements, Trust Deeds and Protected trust Deeds and who advise on all solutions available to debtors.

The DRF has a code and standards which exceed that required by the Office of Fair Trading and is currently in the course of seeking OFT approval for this code.

The DRF is the training and examination body for the Certificate in Debt Resolution, a 210-hour study, three written examination qualification accredited by the UK’s largest academic awarding body, Edexcel. All client-facing staff in DRF member companies have to be trained to this standard.

DRF members receive an annual onsite inspection by the Insolvency Practitioners Association, an independent body that is trusted by the government to regulate licenced insolvency practitioners.

The DRF has an independent complaints committee, chaired by David Hawkes, National Money Advice Co-ordinator at Advice UK and with a majority of lay members.

More information about The DRF can be found on the website:


In relation to client accounts, the DRF believes it is entirely inadequate that an audit should only confirm procedures for payment of client monies into the client account, that no interest accrues on the funds and that the client account is separate to company funds.

The DRF believes that effective monitoring of client accounts must confirm that:

  • All client funds are paid into client accounts
  • It is confirmed by the bankers that these accounts are clearly designated as client accounts and the bank is aware it must treat these monies as ring fenced for clients (i.e. in the event of insolvency the bank could not offset monies due against these accounts)
  • No interest accrues on the balances
  • No bank charges are debited to the client accounts
  • Regular reconciliations are performed to show that there are sufficient monies in the client account to cover all liabilities
  • These reconciliations are carried out monthly and evidence retained to enable this to be effectively monitored.


Andrew Smith:

Tel: 0161 968 6825

Mob: 07912 407 532


Twitter: @Andrew_F_Smith

Sally Hardiman:

Tel: 0161 968 6815


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