Jo Swinson
Main Page: Jo Swinson (Liberal Democrat - East Dunbartonshire)(10 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
A new voluntary protocol is now in place for commercial debt management companies, which will provide greater protection for consumers.
A total of 22 companies, who supply more than half of the commercial market, have signed up to the protocol which went live on 1 October 2013.
The firms have agreed not to charge upfront fees and to spread the recovery of their set-up fees evenly over at least the first six months, ensuring that plans are affordable and sustainable for the consumer. They will also have to tell consumers free debt advice and management services are available and that there are other debt relief options. Creditors will also benefit from the protocol as they will have more reassurance over repayment of their debts and will always be told when a customer is in a debt management plan.
The protocol commits companies to:
No upfront fees for consumers
Spreading the cost of setting up a debt management plan over at least six months
Telling consumers that free debt advice is available to them
Providing payments to creditors from the first month
An assurance for creditors that only sustainable plans will be put forward for them to consider, that is where there is a realistic commitment to repayment
Dividing payments pro rata among all creditors
Providing access for creditors to full financial information about customers (subject to compliance with Data Protection Act principles).
This is a major step forward for people using commercial companies to manage their debt problems. They will now have added protections if they use firms signed up to the debt management plan protocol.
It is important that consumers should also know that free advice is available. They can contact the National Debtline on 0808 808 4000 for free and confidential advice. The Money Advice Service can also signpost people to appropriate and free debt advice services and can be contacted on 0300 500 5000.