It’s now or never; the way DMPs work will change – this November

DRF Chairman meets to discuss criteria and implications of the proposed Debt Management Protocol.

Dear Member,

Yesterday (Thursday 14 June,) Andrew Smith, Andrew Graveson and I attended a meeting at the Department of Business Innovation and Skills hosted by Norman Lamb*, the Minister responsible for consumer debt policy.

I am writing to you now, as soon as possible after the event, because this meeting was absolutely pivotal to the future of all debt management organisations, whether free to client or fee charging, and to all creditors who deal with debtors in England and Wales.

Put simply, our industry, the free-to-client sector, appropriate government regulators and creditors have until the end of November to agree on a debt management protocol or the Minister will impose one on us, probably using the powers present in the Tribunals, Courts and Enforcement Act 2007.

The key criterion for the new plan is that it has to be sustainable and of high standard (the OFT’s new debt management guidance is likely to be regarded as a minimum level). Much of the way we work is likely to change. Access to these debt management plans, which is likely to be the majority of those in the marketplace will be restricted to those that meet the new standards and obtain a “kite mark” for doing so. This may well make OFT Code Approval irrelevant.

This is a huge opportunity for the industry which we could miss out on if neither creditors nor the free-to-client sector engage with the project. The prospect of a regulated plan will be far more damaging for us. The free-to-client sector made its opposition quite clear at the meeting yesterday (predictably) and, whilst creditors kept their powder dry, it is clear their agreement will only be forthcoming if the possible plan becomes an effective collections mechanism for them. Government Agencies vary in attitude. The Insolvency Service is supportive of a protocol that will allow high-quality debt management companies to thrive, whilst the Money Advice Service clearly states that, whilst capacity exists, they will only refer cases, through their very well-funded triage system, to free-to-client providers (and they include Payplan here).

We still don’t know what the plan will look like, and there will be further opportunities to make contributions to its development over the summer. We will involve members as fully as possible in these.

Meanwhile, if you want to know more, you can’t do better than revisit the documents we circulated in our last newsletter sent on 1st June 2012 and which you can view in pdf format here: Debt Management Plans – Voluntary Code summary for meeting on 14 June 2012.

A last minute reminder. There are now 68 people registered for Monday’s research debrief (at the Manchester Conference Centre), including 24 members of the creditor community. Representatives of free-to-client providers are also attending and we’ve invited DEMSA representatives too, There are still places available. It’s free. If you want to come please contact Gaynor Loughnane –

Yours sincerley,

David Mond

David Mond
Debt Resolution Forum Chairman


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