Trust-Deed.co.uk recently conducted a survey of clients which found that 94% of people thought debt advisors should be further regulated.
Strong regulation is currently in place for those who directly provide Individual Voluntary Arrangements (IVA) and protected trust deeds. Both IVAs and Trust Deeds are personal appointments taken on by an insolvency practitioner. Even though they may work for an accountancy or insolvency company this person has personal responsibility for any case that they take.
Insolvency practitioners are members of professional associations that also serve as their regulators. Regulation of standards is thorough and taken very seriously by the individuals themselves and their teams.
However, it is true to say that some caution should still be exercised in finding an IVA or Trust Deed company. Some smaller companies may be able to provide a more personal service while larger firms are sometimes unable to provide this.
Debt Management Plan and Debt Advice Regulation
Debt advisers (who may work individually, or on behalf of a licensed company) give advice about a wide rage of debt management solutions including debt management plans, IVAs and Bankruptcy. They are required to hold a Consumer Credit Licence (CCL) which is issued by the Office of Fair Trading.
Anyone applying for a CCL must follow a stringent application process which will check, amongst other things, that they have sufficient competence to provide debt and trust deed advice.
However this process of CCL application was only c18 months ago. Many thousands of CCL’s were issued prior to this date and very little if any competency checks were carried out on these applications.
As such there are many individuals and companies licensed to provide debt advice who do not necessarily have the competence to be able to properly advise their clients. The OFT appear determined to improve standards. However, this process remains at a relatively early stage.
Debt Management Advertising Rules
The Advertising Standards Authority requires advertisers to be fair in the way they promote their services or products.
There have been instances where excessive claims made by debt advice companies have been investigated. This includes claims such as, “a trust deed or IVA can lead to 90% of your debts being written off” when in fact this will only be the case for a very limited number of individuals..
As mentioned previously the OFT also manages the advertising of protected trust deeds, IVAs and debt management plans via their “debt management guidance”. This requires that a fair picture is provided so any individual making a decision regarding their debt options has accurate information available, which is presented to them in a clear and fair way.
Some areas of the personal insolvency sector are clearly already significantly regulated. Improvements are being made in the area of debt management but there is still work to do.
As such, to ensure you are getting the best advice, it is important to carry out research on the internet and then discuss your problem with more than one advisor This will allow you to compare the information you are given and work with an advisor you feel most comfortable with.
