After a joint initiative between debt management bodies and other parties, the new protocol is to be put in place which will impact thousands of plans.The view is to make all plans more sustainable and achievable, and giving consumers confidence in their providers.
Debt Resolution Forum (DRF), the standards, training, monitoring and complaints handling body for fee-charging debt solutions providers today, Thursday 7 February 2013, welcomed the announcement, by Business Minister Jo Swinson, of a protocol for debt management plans – the result of a joint initiative between the debt management membership bodies, creditor groups and the Insolvency Service (a government agency).
“The new protocol will have a huge impact on the many thousands of plans put in place by debt management providers, making them more sustainable and achievable, and giving consumers confidence in their providers” commented David Mond, chair of Debt Resolution Forum: “DRF was delighted to play a major role in the many months it took to create this protocol and looks forward to helping to continue to improve it as a member of the standing committee that will oversee the protocol’s development.
“The protocol will see set-up fees spread over longer periods, making plans more sustainable and providing earlier returns to creditors as well as ensuring high standards of advice are provided. These, and other areas, such as the safety of clients’ money, will be checked by independent monitors. It’s a huge step forward in creating a trusted commercial debt solutions sector.
“Currently, around three quarters of debt management plans are provided by fee-charging companies and 40% of clients have shopped around, with 20% either having considered free advice or having moved from a free to client advisor. Fee charging debt solutions providers’ clients are far less likely to be the very vulnerable individuals advised by creditor funded organisations and debt charities.
“The protocol represents a codification of the standards already operated by the best commercial debt solutions providers and we believe it is something to build on to ensure a fair deal for debtors and an effective, appropriate mixed economy for debt advice in the UK”
Notes for Editors:
1. Debt Resolution Forum (DRF) is a trade association for fee-charging debt resolution providers and lead introduces. It operates the leading qualification in the sector, the EdExcel accredited Certificate in Debt Resolution, which has around 800 students and qualified individuals.
2. Members of DRF are subject to annual onsite monitoring by government-trusted insolvency professional body, the Insolvency Practitioners Association.
3. DRF operates an independent complaints and disciplinary committee to deal with consumer and creditor complaints with a majority of lay members and which is chaired by David Hawkes, head of Money Advice at Advice UK.
Link to Debt Management Protocol
Link to Executive Summary