Online news: Government mulls DMP protocol 6 October 2011

The government is considering the introduction of a protocol to improve standards in the debt management industry, a minister has revealed.

Edward Davey, minister for employment relations, consumer and postal affairs, said the protocol would follow on from enforcement action taken against rogue debt management firms by the Office of Fair Trading, following a review of the sector.

A protocol already exists for Individual Voluntary Arrangements (IVAs) but Davey told an audience assembled at a conference organised by Credit Today’s sister title, Insolvency Today, that he would chair a working group later this year looking at whether a similar protocol could be introduced for Debt Management Plans (DMPs).

Davey also revealed that a pilot scheme had begun between the Consumer Credit Counselling Service (CCCS) and the Citizens Advice Bureau (CAB) to assess ways to deliver best value debt advice in the free sector.

From April next year, the Money Advice Service (MAS) will have responsibility, backed up by government funding, to co-ordinate debt advice in the free sector.

“I do not wish to prejudge but it seems to me there are a lot of people who do not know where to turn with debt advice problems,” he said. “The level of support these people need is greater than what is being provided. We have to get the channels right and the Money Advice Service is looking at that in some detail.”

To this end he added that lenders had a greater duty to their struggling customers to point them in the direction of good, independent debt advice.

“It is bizarre that when lenders and other creditors send their reminders they do not make it explicit where people can go for advice,” he said. “So, there is a lot we can do to improve things for consumers and that is the direction of thinking.”