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New - Debt Management Protocol

Sunday, 17th March 2013

117-confusedNew protection for those consumers paying for debt advice  

The new Debt Management Plan (DMP) Protocol

Consumers who pay for advice about managing their debts are now protected by the new Debt Management Protocol, launched by the government in February 2013 to drive up standards in the debt management industry.

The key points of what the protocol means to the consumer and to debt advice firms are as follows

Debt Management Plan Firms that sign up to the protocol must:

  • Take set- up fees over at least six months and not from the usual first one or two months
  • Take admin fees over the life time of the plan, and will not be allowed to charge a fee for a review
  • Not sell other products that will reduce the return to creditors in the plan, such as life insurance
  • Inform the creditor if the DMP will last more than 10 years and why
  • Review the DMP every six months and update balances/statements
  • Carry out an annual review to see if the individual’s financial circumstances have changed

Creditors 

Those creditors that feature in the new Protocol will have 10 working days to get the information to the DMP provider and must

  • Give the consumer 30 days breathing space to enable them to get debt advice
  • Suspend all collection activity for the 30 days
  • Explain to the DMP provider why interest and charges are not being frozen
  • Inform the DMP provider if the debt is sold on, and to whom
  • Respond within 10 working days to requests from the DMP provider

Consumer benefits 

A debt management firm that adheres to the protocol offers reassurance to a consumer paying for debt advice that the firm observes these minimum standards.

Debt Management plan providers cannot say they are compliant until they have  passed a rigorous examination by a competent body when they will then be able to display a badge/logo on their website headed paper etc denoting their compliance.

Who regulates debt counselling?

From April 2014 all debt counselling came under the city regulator, the Financial Conduct Authority (FCA)

So just how easily can you spot that dodgy debt advice website?

You can do this in about one minute of your time, that’s all, and if you find that even just one of the 7 points in our guide applies to the website you are looking at then the alarm bells must surely ring out.

Show me the 7 point guide to spotting a dodgy debt advice website!

Where can I get debt advice?

Debtwizard.com

  • Helpline: 01376 563 365 (Mon to Fri 9.00am - 7.00pm)
  • Or complete the rapid debt help form and we will call at a time that suits you.

Who we are

Or click on the following link to get details of other free organisations, including debt charities.

Take me to free debt advice agencies 

You can follow Mike on twitter by using @debtwizard Facebook/DebtWizard

 

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